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Supreme Court of Victoria |
Last Updated: 17 January 2022
AT MELBOURNE
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JUDGE:
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WHERE HELD:
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DATE OF HEARING:
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CASE MAY BE CITED AS:
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MEDIUM NEUTRAL CITATION:
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PRACTICE AND PROCEDURE – Group proceedings – Application by
defendants that proceeding no longer continue as a group proceeding
–
Whether group proceeding not an efficient and effective means of dealing with
group members’ claims – Whether
otherwise appropriate to make order
sought – Whether in the interests of justice that proceeding no longer
continue under Part
4A – Whether application premature – Supreme
Court Act 1986 (Vic) s 33N(1) – ISG Management Pty Ltd v Mutch
(2020) 385 ALR 146 – Multiplex Funds Ltd v P Dawson Nominee Pty Ltd
[2007] FCAFC 200; (2007) 164 FCR 275 Bright v Femcare [2002] FCAFC 243; (2002) 195 ALR
574.
PRACTICE AND PROCEDURE – Strike out application – Term
implied by custom or usage – Whether further and better particulars
before
filing of defence necessary or desirable.
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APPEARANCES:
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Counsel
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Solicitors
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For the Plaintiff
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HWL Ebsworth
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For the Defendant
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Norton Rose Fullbright
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Part A: Introduction and Background
1 Beecham Motors Pty Ltd (Beecham,
or the plaintiff) has commenced a group proceeding under Part 4A of
the Supreme Court Act 1986 (Vic) (the Act) against General Motors
Australia NSC Pty Ltd (GM Holden, or the defendant) for claims
arising out of alleged breaches of dealership agreements for the sale and
service of new Holden brand motor vehicles.
2 Beecham
has been an authorised dealer of Holden brand vehicles since 1989. GM Holden, a
wholly owned subsidiary of General Motors
which is based in America, is said to
have established a network of Holden dealerships in Australia. Beecham brings
this action
on behalf of itself and others who entered into dealer agreements
with GM Holden commencing on 1 January 2018 for five year terms,
for the sale
and service of new Holden brand vehicles. The class is closed and comprises the
plaintiff and nine other group members
who sold and serviced Holden brand
vehicles in dealerships located in various Australian
States.
3 Beecham claims damages for alleged breaches
of its dealership agreement (the Agreement), said to flow from GM
Holden’s failure to supply new Holden vehicles in accordance with the
Agreement, following notification
of the retirement of the Holden brand in
Australia in February 2020. The dealership agreements between the group members
and GM
Holden are alleged to have been in substantially the same terms as
Beecham’s dealership agreement.
4 GM Holden has
applied for an order under ss 33N(1)(b), (c) or (d) of the Act that the
proceeding no longer continue as a group proceeding under Part 4A of the Act.
GM Holden has also applied to strike out parts of the plaintiff’s
statement of claim, and for further particulars
of the group members’
damages claims.
5 For the reasons that follow:
(a) the application under s 33N is refused;
(b) I will strike out and require the re-pleading of sub-paragraph 11(C) (but in more limited respects than those advanced by the defendant);
(c) I will strike out sub-paragraph 5(f);
(d) I will not require the plaintiff or group members to provide particulars of loss at this stage of the proceeding.
Part B: “De-classing” application under s 33N
Governing principles
6 Section 33N is in the following terms:
33N Proceeding not to continue under this Part(1) The Court may, on application by the defendant, order that a proceeding no longer continue under this Part if it is satisfied that it is in the interests of justice to do so because—
(a) the costs that would be incurred if the proceeding were to continue as a group proceeding are likely to exceed the costs that would be incurred if each group member conducted a separate proceeding; or
(b) all the relief sought can be obtained by means of a proceeding other than a group proceeding; or
(c) the group proceeding will not provide an efficient and effective means of dealing with the claims of group members; or
(d) it is otherwise inappropriate that the claims be pursued by means of a group proceeding.
(2) If the Court dismisses an application under this section, the Court may order that no further application under this section be made by the defendant except with the leave of the Court.
(3) Leave for the purposes of subsection (2) may be granted subject to such conditions as to costs as the Court thinks fit.
7 The principles governing the application
of s 33N are well understood.
8 While s 33C of the
Act is concerned with the threshold requirements for commencing a group
proceeding under Part 4A, s 33N is concerned with the continuation of a
proceeding once it has been
commenced.[1] It follows that a
proceeding may satisfy the threshold requirements for commencement (including
the requirement that the claims
of group members give rise to a substantial
common issue of law or fact, as required by s 33C(1)(c)), but nevertheless
properly attract the exercise of a discretion to order that it not
continue as a group
proceeding.[2]
9 The
condition for exercising the discretion conferred by s 33N is that the Court
reach a state of satisfaction that it is in the interests of justice to make an
order that the proceeding no longer
continue under Part 4A, because of one or
more of the four reasons set out in sub-sections (a)-(d). The Full Court of the
Federal Court has in a recent
decision conveniently designated those factors the
“costs ground”, the “individual proceedings ground”, the
“efficiency ground” and the “alternative
ground”.[3]
10 Section
33N calls for an evaluation made on an objective assessment of the
facts,[4] and invites consideration of
what purpose the representative proceedings might
serve.[5] As Kiefel J said in
Bright v Femcare:[6]
In general terms the matters listed for the court’s consideration under paras (a)-(c) [of s 33N(1)] require consideration as to what would be achieved by a determination of the proceedings in their present form and the costs of doing so. If there is some real benefit to be gained, the requirement that the proceedings be seen as an inefficient means of dealing with the claims might not be met. ... The inquiry required by the subsection is not whether the continuance of a representative proceeding can be seen to be efficient, but whether the court is satisfied that it is in the interests of justice to order its discontinuance as a proceeding under Part IVA for the reasons listed in paras (a)-(c) of s 33N(1). A court may also order a discontinuance if it thinks it is otherwise inappropriate that the claims to be pursued in that way: para (d).
(emphasis added)
11 The statutory text makes clear that
the Court must be satisfied not only that one or more of the grounds in
sub-sections (a)-(d)
is established, but that because of that factor or those
factors, it is in the interests of justice to de-class the proceedings.
Unless
the Court is so satisfied, the proceeding is to continue as a group
proceeding.[7] The word
“because” points to the need for a causal connection between the
specified grounds and the interests of
justice.[8] The defendant bears the
onus of satisfying the Court that the power under s 33N should be
exercised.[9]
12 As
Macaulay J said in Uber Ruling No 1, the structure of s 33N makes clear
that in determining whether an order under s 33N ought be made, the first step
is to consider whether one or more of the reasons set out in sub-paragraph
(a)-(d) are made out. If
so, the power to order de-classification thus
enlivened, the second step is to consider whether it is in the interests of
justice
to so
order.[10]
13 Recently,
in ISG Management Pty Ltd v
Mutch,[11] the
Full Court of the Federal Court, focussing on the difference between ss
33N(1)(a)-(c) on the one hand and s 33N(1)(d) on the other, described the
inquiry required by s 33N as a three step process. As the Full Court described
it, the process is to first ask whether any or all of the matters specified
in
ss 33N(1)(a) to (c) are made out; next, whether there is another different
reason why it is inappropriate that the claims be pursued by means of a
group proceeding, and thirdly, if one or other of the grounds are
made out,
whether, because of that established ground or grounds, the primary judge
should reach a level of satisfaction that it is in the interests of justice
to
de-class the proceeding.[12] It is
unnecessary to decide in this case whether describing the analytical process
required by s 33N as involving two
steps[13] or three steps expresses a
substantive point of difference. If there is one, it will concern the
relationship between the “alternative
ground” and the other
grounds.[14] That question might
have little practical application in many cases. Each manner of describing the
operation of s 33N accepts that once one or more of the grounds in sub-ss
(a)-(d) is made out, the next step is to ask the dispositive question: is
the
court satisfied that it is in the interests of justice to order that the
proceeding no longer continue under Part 4A, because of one of the specified
reasons. In any event, the issue does not arise in this case. GM Holden relied
upon some of the
same facts as founding an order under ss 33N(1)(c) and (d), as
supported by sub-s (b), and neither party submitted that the analysis or the
outcome would differ depending upon whether
the considerations were described or
understood as involving two or three
steps.[15]
14 As
Lindgren J said in Bright v Femcare, the grounds set out in sub-ss
(a)-(d) raise practical questions which require that the representative
proceeding be compared with
other proceedings that are available to the
applicant and group members as a means of resolving their
claims.[16] The provision invites a
comparison between the pursuit of the group members’ claims in the subject
representative proceeding,
and their pursuit in hypothetical, non-representative
proceedings. The comparison is invited explicitly by ss 33N(1)(a) and (b), and
implicitly, by ss 33N(1)(c) and
(d).[17]
15 There
is a divergence in the authorities on the question whether a comparison between
the subject proceeding and a hypothetical
non-representative proceeding is an
available or necessary consideration under ss 33N(1)(c) and
(d).[18] It is unnecessary to
express a view on the correctness of either approach on this occasion. I am
inclined to think however, that
the issues for consideration raised by ss
33N(1)(c) and (d) were aptly summarised by Jacobson J in Multiplex this
way: the question of inefficiency or appropriateness for the purposes of s 33N
is to be determined in light of all of the circumstances of the proceeding,
including reference to any relevant “comparator”
proceeding.[19] The arguments
advanced on this application supposed the appropriateness of comparing the
present proceedings to alternative proceedings,
as reflective of the facts in
play. It was not put that this is a case where “the inefficiency or
inappropriateness of the
claims as a representative proceeding [is] so great
that the only possible order is to ‘de-class’ the
proceeding”.[20]
16 It
has been accepted that the implicit focus of s 33N(1)(c) is on the commonality
of the issues advanced in the representative
proceeding.[21] The relevant
considerations informing the establishment of the efficiency ground will depend
on the facts in the particular case,
but it has been recognised that any
additional burden thrown on the plaintiff and group members “by being
relegated to ordinary
proceedings” is an aspect of the efficiency
question.[22] Section 33(1)(d) has
been described as being concerned with whether the representative proceeding is
an appropriate vehicle to pursue the
claims.[23] Section 33N(1)(d) calls
for a broad, evaluative
judgment.[24]
17 As
Jacobson J put it in Multiplex (Full
Court):[25]
Section 33N(1)(c) calls for a consideration of the efficiency and effectiveness of the representative proceeding as a means of dealing with the claims. So too, s 33N(1)(d) calls for consideration of the appropriateness of a “representative proceeding”, as a vehicle by which claims are to be pursued.
The focus therefore of both of those grounds is “the claims” of the group members. What is required to enliven those grounds is a consideration of the efficiency or appropriateness of the claims in the existing representative proceeding. The enquiry is a wide one as was explained by Kiefel J in Bright v Femcare.
(citations omitted)
18 I respectfully agree with that
analysis. It is important to bear in mind the statutory language, which in both
ss 33N(1)(c) and (d) directs attention to the pursuit of the claims of group
members by the group proceeding, and which in both cases is expressed
in the
negative. To engage the efficiency ground it is necessary to be satisfied the
group proceeding will not provide an efficient and effective means of
dealing with the claims. To engage the alternative ground it is necessary to be
satisfied
that it is otherwise inappropriate that the claims be pursued
by means of a group proceeding. The latter criterion “invites a normative
judgment made by reference
to the scope and purpose of the
Act”.[26]
19 As
to s 33N(1)(b), as the Full Court observed in Mutch, that ground is
almost always present in a class
action.[27]
20 A
de-classing order may only be made if the Court is satisfied that it is in the
interests of justice to so order. As Beach J
recently expressed the proposition
in Stack, to show the existence of a trigger (one of the grounds in ss
(a)-(d)) does not inevitably lead to it being in the interests of justice
to
de-class.[28] Assessing the
interests of justice involves a degree of subjectivity and can broadly be
described as a discretionary
decision.[29] For the purposes of s
33N the relevant interests of justice have been said to include the public
interest of promoting the efficient use of court time and
the parties’
resources, providing a remedy for those without the resources to bring
individual actions, and protecting defendants
against multiple suits and the
risk of inconsistent findings.[30]
The relevant interests of justice should be understood by reference to the
language and structure of Part 4A, which is the statutory context within which s
33N sits. The statutory context includes the threshold requirements of s
33C,[31] which are central to the
statutory scheme.[32] It also
includes the provisions made for the case management of individual issues within
the framework of a proceeding commenced
within Part
4A.[33]
21 Finally,
it has been accepted that the fact that a group proceeding has a small number of
group members is not itself a basis for
making a de-classing
order,[34] and that there is no
prescribed time at which an application may be made under s
33N,[35] although it is important
that the Court be in a position to assess circumstances informing the
application of the provision. It
is common practice to consider a de-classing
action after pleadings have closed or at a later time, including after the
preparation
of evidence.[36]
The pleaded case
22 The application has been brought at a
very early stage in the proceedings. A defence has not yet been
filed.
23 The pleaded case is relatively simple in
that the plaintiff alleges for itself and all group members a single cause of
action,
namely breach of contract. As noted, the contracts between the
defendant and the plaintiff and the defendant and each group member
are said to
have been in substantially the same terms. The elements of the pleaded case can
be summarised in this way:
(a) Context concerning the GM Holden network of dealerships and the retirement of the Holden brand in 2020 is alleged;
(b) GM Holden entered into agreements with the plaintiff and each of the group members which were each dated 1 January 2018, pursuant to which the defendant appointed the plaintiff and each group member as an authorised dealer to sell and service new motor vehicles under the Holden brand until 31 December 2022;
(c) The agreements (in each case) were partly written and partly to be implied. The written terms were contained in documents that were materially the same in each case. They are said to have included written terms that purchase orders received by GM Holden would be considered to be bonda fide and non-cancellable except as otherwise specified; that GM Holden would endeavour to supply dealers with sufficient quantity of vehicles that would allow achievement of a “sales evaluation guide” or reasonably meet anticipated demand, and that GM Holden would deliver new vehicles to dealers in a time scale which satisfies both dealers and customers subject to capacity and logistic constraints;
(d) The agreements were each said to contain an implied term that GM Holden would ensure the availability of supply of new Holden brand motor vehicles or a substitute thereto. The term is said to have been implied on the basis that it is necessary to give business efficacy to the contract, or on the basis of custom or usage in the Australian car dealership industry. The implication by custom or usage (an implication in fact) is the subject of the strike out application which is considered later in these reasons;
(e) The circumstances concerning the winding down of the Holden brand in Australia leading to the cancellation of orders and non-acceptance of new orders is alleged;
(f) The defendant breached the agreements including by failing to ensure the availability for supply of new Holden brand motor vehicles or a substitute thereto (a breach of the implied term), by failing in fact to supply any, or any sufficient supply of, motor vehicles at all or in the manner required by the agreements. In respect of the alleged breaches it is said that the supply of vehicles to the plaintiff and each group member was inadequate from 4 March 2020 or shortly thereafter, and by August 2020 the defendant had ceased to supply any new vehicles to the plaintiff and group members;
(g) In respect of the plaintiff and each group member the claim sets out what is said to be reasonably anticipated demand for particular models of Holden motor vehicles (by number of vehicles over the relevant period which is precisely specified and which is the same in each case), and the share of the vehicle build or allocation in fact received over the relevant period;
(h) The plaintiff and each group member claims damages for breach of contract.
24 It is apparent then that the question of continuity of supply of Holden vehicles (as it concerns the nature of the contractual obligations and whether or not they were fulfilled) is at the centre of the case.
The common questions
25 It is convenient to mention the common
questions at this point. Although s 33H of the Act requires that the questions
of fact or law common to the claims of the plaintiff and group members be
specified in the
originating process, it is common and accepted practice for the
parties to refine the expression of the questions as the proceeding
progresses
(and for Courts to require as much), including before the commencement of a
trial at which the common questions will be
determined.[37]
26 It
was accepted in argument that the expression of the questions as they appear in
the statement of claim may be refined. Presently,
the common questions are said
to be whether the dealer agreements contained the alleged implied term that the
defendant would ensure
the availability for supply of new Holden brand motor
vehicles or substitutes thereto for the duration of the term of each dealer
agreement, and whether the defendant breached the implied term, or one or other
of five express terms.
27 The plaintiff submitted
that the issues in the case, apart from damages, were largely common issues.
That proposition was contested
in the defendants’ written submissions, by
which is was said that the common issues are “necessarily limited to
contractual
construction and potentially some aspects of the question of
breach”. It was said that those issues could be expected to require
limited evidence whereas a far greater proportion of any trial time would be
required to address individual issues. It was also
said that the
“bifurcated process” which will be necessary to resolve the claims
of group members if the Part 4A proceeding is maintained, may not be required if
each group member is named as an individual plaintiff in a differently
constituted
proceeding. I will say more of the alternative form of proceeding
later, but the point that the common issues would require little
attention,
relatively speaking, was not pressed (or at best, pressed only faintly) on the
application. The contention was sparsely
elaborated, and no evidence was led in
support of it. Had the point been pressed I would have accepted the
plaintiff’s submission
that it was brought prematurely in circumstances
where no defence has been
filed.[38]
28 As
discussed below, the defendant rested its application (including as to
efficiency) on other grounds. It is necessary however,
to consider what may be
advanced by the common issues shared between the plaintiff and group members in
the group proceeding. That
inquiry informs the assessment of the
defendant’s application.
29 The defendant
accepted in argument for the purposes of the application that the existence or
otherwise of the alleged implied term
raises true common questions of fact and
law, and that other questions as to the existence of terms in the agreements
(construction
questions) would also arise.
30 The
defendant accepted that the issue of breach of the implied term, and probably
also breach of other alleged terms, would give
rise to common
questions.
31 To state the obvious, evidence
establishing a failure by the defendant to supply vehicles to one dealer would
not, as a matter
fact, establish a failure of supply in respect of any other
dealer, and a legal conclusion that an agreement between the defendant
and one
group member had been breached would not stand as a conclusion in respect of any
other agreement. However, on the subject
of breaches of the agreements, the
starting point is that the terms of the agreements are alleged (and accepted for
present purposes)
to have been common. In that context, it appears from the
statement of claim that the cessation of the supply of new vehicles affected
the
plaintiff and group members at the same point in time and arose out of a series
of events that was common to group members, in
that the winding down of the
Holden brand in Australia was effected in relation to the dealership network
generally. It is said
that GM Holden issued a notification to its network of
authorised dealers on 26 February 2020 that it would cancel and remove
“un-referenced”
orders for new Holden brand vehicles in its ordering
system and not accept any orders for additional vehicles after 3 March 2020,
but
would offer an equitable share of remaining stock, and from that date it acted
in accordance with that notice by taking the specific
steps set out in the
claim. In that way, although the supply of Holden vehicles to dealers
necessarily entailed individual transactions,
the defendant sensibly accepted
that aspects of the breach case would give rise to common
questions.
32 As I have said, a defence has not yet
been filed, but from the statement of claim it is apparent that the proceeding
will require
consideration of least the following issues:
(a) The terms of the dealer agreements, including the implied term. It was apparent from the argument on the adequacy of that aspect of the pleading that the implication, by custom or usage, of the term concerning continuity of supply, will be the subject of evidence and is expected to be contentious. In other words, it is a term said to have been implied in fact and gives rise to factual questions, not just questions of construction. Indeed, those issues are at the centre of the dispute;
(b) The circumstances concerning the winding down of the Holden brand in Australia and the cessation of the supply to dealers of new vehicles, which are said and which appear to be accepted to be common at least in some respects, with the caveat that the supply of vehicles to each dealer entails the submission of purchase orders by that dealer;
(c) Breach of the implied term, which is accepted to involve common questions of fact;
(d) Breach of various express terms which, for the reasons discussed, were accepted to involve at least some common questions of fact;
(e) Quantification and proof of damages, which are individual questions.
33 I have addressed the common issues and the matters likely to arise in the proceedings at a high level of generality and by reference to the statement of claim, because that is how the issue was presented on the application, reflecting the early stage to which the proceeding has progressed.
Circumstances in which the proceeding is brought
34 The defendant relied on the circumstances in which the proceeding has been brought, which are said to give rise to its two-fold concerns that unless the proceeding is de-classed and reconstituted in some other form, the defendant risks being exposed to other claims by the group members that are not alleged in this proceeding, and that it will remain deprived of the benefit of the ability to make offers of compromise to group members under Order 26 rule 2 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules). The circumstances established by the evidence are relevantly as follows:
(a) The plaintiffs’ solicitors (HWL Ebsworth, or HWLE) have in recent times acted for the dealers who comprise the entire new car Holden dealer network in Australia, which comprised 185 dealers. That cohort included the plaintiff and group members.
(b) Following its wind-down announcement in February 2020, HWLE wrote to GM Holden stating that the dealers were in dispute with both GM Holden and the General Motors Company in relation to the wind-down. It was said that the dispute included claims that GM Holden and General Motors had been engaged or involved in misleading or deceptive and unconscionable conduct. HWLE’s letter of 16 March 2020 set out details of the alleged contraventions. It was said that GM Holden and General Motors had made representations to dealers to the effect that Holden was staying in Australia long term and would continue to sell motor vehicles. Six instances of representations were set out. It was said that the five year term of the dealership agreement was unconscionable, including because GM Holden encouraged or acquiesced in the sale of dealerships when it knew that a dealer could not recoup its investment within that timeframe. The letter sought to reserve HWLE’s clients’ rights in respect of contractual remedies. It was said that if the dispute could not be resolved, legal proceedings would be commenced in Australia against GM Holden and General Motors. In May 2020 HWLE sent to GM Holden a notice of dispute under the Competition and Consumer (Industry Codes – Franchising Regulation) Code 2014 and dispute resolution provisions of the dealer agreements, on behalf of the dealer cohort whose 185 members were named in an attached schedule. The notice sought resolution of the dispute by the payment by GM Holden of compensation to the dealers. It attached a position paper. The paper repeated and elaborated upon the substance of the matters that had been set out in HWLE’s 16 March 2020 letter. It was marked “without prejudice”.[39] It added that GM Holden had repudiated the dealer agreements. The paper set out a formula for the calculation of compensation sought by the dealers and responded to an offer that had evidently been made by GM Holden, setting out why the offer was said to be inadequate.
(c) In June 2020 GM Holden and the 185 dealers participated in a 2 day settlement conference. GM Holden made open offers to each of the dealers. It has subsequently settled its dispute with the dealers other than the plaintiff and group members and two other dealers.
(d) The plaintiff and group members are located in different states of Australia. Although this was not specifically the subject of an affidavit, it was not contested that only one group member is located in Victoria.
35 The parties were not at odds in relation to the facts, but in relation to what could be drawn from those facts for the purposes of this application.
Parties’ submissions
36 The defendant’s application
principally rested on two propositions which were said to be relevant to each of
ss 33N(1)(b),
(c) and (d).
37 First, that there was
a “real risk” that the defendant would face additional claims by the
group members that might
be advanced in other proceedings, particularly if this
proceeding were unsuccessful. In particular, in accordance with the principle
established in Timbercorp Finance Pty Ltd v
Collins,[40] the
defendant would not have the benefit of an Anshun estoppel against group
members in respect of non-common issues, more specifically un-pleaded claims
that the defendant fears may
be brought at a later time. That disadvantage to
the defendant would not arise were the proceeding de-classed and group members
required to issue individual claims or be joined as plaintiffs in a single
proceeding (or some combination thereof) (the estoppel point). The
subsequent pursuit of additional claims by the same group members was put as a
“real risk”. The defendant said
it could not put it any higher than
that, but because the group members had in fact asserted other claims in the
context set out
above through their lawyers, that risk ought not be regarded as
merely speculative.
38 The defendant submitted that
it is in in the interests of justice that the Court make an order under s 33N(1)
because the public
policy objectives of Part 4A are not met by this matter
continuing as a group proceeding. The continuation of the proceeding does
not
promote efficient use of court time or the parties’ resources because it
poses a spectre of multiplicity by reason of subsequent
proceedings. That risk
arises in circumstances in which a group proceeding is unnecessary to provide a
remedy for group members
who could achieve the same relief if each was named a
plaintiff. This is not a claim on behalf of a large number of group members
but
a small number, who are known, and commonly represented. Finally, an assessment
of the interests of justice must include consideration
of the interests of the
defendant, including the need to protect GM Holden from a multiplicity of suits
arising from the same facts.
Such protection is a key policy objective of the
group proceeding regime and the use of a group proceeding in this case
“actively
thwarts” that
objective.
39 Secondly, the defendant maintained
that the representative proceeding has created a barrier to effective
settlement, because the
defendant may only make offers of compromise under Order
26 rule 2 to a party, and group members are not parties. Once again, that
impediment would not exist were the group members made parties to an alternate
proceeding (the Order 26 point). While acknowledging that it
could make offers in a different form (a Calderbank offer, for example),
other forms of offer could not deliver the same costs incentives. The refusal
of Calderbank offers would not expose group members to adverse costs
consequences. This meant that the defendant was left without a mechanism
to
“seriously encourage” group members to consider any settlement
offer, particularly in circumstances where it had already
made what it
considered fair and genuine offers.
40 The plaintiff
submitted that the defendant has not discharged the onus of establishing either
the efficiency ground or the alternative
ground, or that it is in the interests
of justice that the proceeding be de-classed on those grounds. More
specifically and in summary,
the plaintiff said that:
(a) The application is premature. Save in an exceptional case the assessments required on an application made under s 33N cannot be sensibly undertaken at such an early stage. In this case, no defence nor any evidence has been filed.[41]
(b) Part 4A of the Act, by design, contemplates multiple actions.[42] The circumstance that group members may bring subsequent cases on non-common issues exists in relation to all representative proceedings because it was the legislature’s intention.[43] Accordingly, the fact that the group members may have other claims that do not form part of the subject matter of the group proceeding will rarely if ever, satisfy the requirements of s 33N(1)(c), that the group proceeding will not provide an efficient and effective means of dealing with the claims of group members, or for that matter, that the group proceeding is otherwise inappropriate as a means of pursuing group members’ claims.
(c) The same response may be made to the defendant’s Order 26 point. The legislature did not make provision for the service of offers of compromise on group members. It so intended, and that general feature of representative proceedings is not a proper basis for de-classing the proceeding.
(d) The defendant’s hypothetical alternative case is speculative and rests on numerous unfounded assumptions. GM Holden assumes that were its application to be granted, all plaintiffs would seek and be granted joinder; that all would plead all possible causes of action; that a single court would case manage all cases to resolution. But in reality each group member would have to consider whether to be joined; whether to commence separate proceedings in this court or another jurisdiction and what claims to bring. The appropriate comparator is that group members would be required to pursue multiple individual actions, noting that they are situated in different states. Simply put, the defendant has identified the wrong counterfactual. Its application would in fact increase the risk of multiplicity, bringing about the very thing it purports to seek to avoid.
Analysis
41 I consider that the defendant has not discharged the onus it bears of establishing that the grounds in ss 33N(1)(c) or (d) are made out, or that by reference to those grounds – individually or in combination, together with the ground in s 33N(1)(b) – that it is in the interests of justice to order that the proceeding no longer continue under Part 4A.
The efficiency ground – s 33N(1)(c)
42 First, to invoke the language of
Kiefel J in Bright v Femcare, there is a real benefit to be gained by the
pursuit of group members’ claims in this
proceeding.[44] I say that by
reference to the analysis of the common issues set out above. Although as I
have said, the proceeding is at a very
early stage, on the material before me
(the pleaded claim) it seems clear and indeed relatively uncontroversial, that
the matters
central to the dispute are common. Taking a pragmatic view of
things on the present material, the determination of the legal and
factual
issues that are common, will go a substantial way towards resolving the matters
central to the parties’ dispute. It
is theoretically possible that
individual issues might be raised in the defence when filed but no more can be
said about that at
present. Prima facie, there is obvious utility in the
proceeding continuing and it cannot be said not to provide an efficient and
effective means of dealing
with the claims of group
members.
43 How is that conclusion affected by
reference to the risk of group members subsequently pursuing un-pleaded claims?
A number of
things may be said about the defendant’s estoppel
point.
44 First, whilst I accept that there is a
risk that the group members might later pursue additional claims against the
defendant in
other proceedings, the prospect of that risk materialising is
speculative. The fact that before these proceedings were issued the
plaintiff’s lawyers wrote to the defendant in the terms they did, stating
that their client group had claims of the kind that
were not subsequently made
in this proceeding, raises the existence of that risk. However, it must be
recalled that although the
group members were part of the dealer cohort
represented by HWLE and on whose behalf HWLE wrote, they were but 9 of 185
dealers then
represented. The letter and position paper (described above) were
expressed in general terms, in respect of the whole group. Of
the matters
raised, a claim based on unconscionable conduct would have been generally
applicable because it was founded on a standard
five year agreement term.
However, the threatened misleading conduct claim was said to have been based on
particular representations
made at particular times. There is nothing (whether
in the HWLE letters or position paper or on this application) to suggest whether
or not the group members in fact received or relied upon those representations
to their detriment. Furthermore and in any event,
the fact that those claims
were foreshadowed in that context does not establish beyond the point of
speculation, that the group members
will, after the conclusion of this
proceeding, decide to pursue such claims. As much as it might be speculated
that the group members
or some of them might in the future form such an
intention, it might also be speculated that they, like the plaintiff, have cut
their
cloth and chosen the claims they wish to bring and have brought them, and
do not wish to bring others.
45 Next, the
postulation of a hypothetical counterfactual proceeding in which such claims
might be pursued, also entails speculation.
I accept that it may be feasible
for the group members to be joined in a single proceeding and that the present
circumstances would
be more amenable to a joint proceeding than say, a class
action comprising a very large number of group members, and group members
who
are not known to the plaintiff or its lawyers. It is also possible however,
that were the proceeding to be de-classed, individual
proceedings would be
contemplated. A joint proceeding with group members named as plaintiffs would
entail relevant structural differences
including exposure to costs and the need
for the joint plaintiffs to agree among themselves to jointly conduct the
proceedings.
I do not regard it as obvious or even likely that the group
members would in fact seek to become joint plaintiffs if the Part 4A
mechanism
were to become unavailable to them by means of de-classing. The counterfactual
comparison is of course a hypothetical
one. It has been said that in most cases
one should compare the group proceeding against the prosecution of individual
claims by
group members.[45]
Statements to that effect do not in my view, express a rule, but that remains a
sensible position to adopt because in circumstances
in which group members are
participating in a group proceeding, what they might otherwise do were that
process to become unavailable
to them, will commonly be unable to be established
to any degree of satisfaction. That is so in this case, notwithstanding that
this case presents a set of circumstances that would be more amenable to a
proceeding conducted by joint plaintiffs than a group
action representing a
large number of claimants or an open class.
46 If
the hypothetical alternative to the present proceeding is taken to be a series
of individual cases (in which the present group
members who become plaintiffs
are required to bring all claims that are sufficiently related to the present
claims that they would
otherwise be estopped from later pursuing) the
alternative would be plainly less efficient than the present proceeding. It
would
increase, not reduce multiplicity, whether in this jurisdiction or in
numerous other jurisdictions (noting that group members are
represented by HWLE
but only one of them is based in Victoria). If in fact the proceeding were
de-classed and that outcome were
to eventuate, the multiplication of disputes
and attendant costs would result.
47 Let it be
assumed that the hypothetical alternative proceeding is a joint proceeding
involving all group members as plaintiffs.
I reject the defendant’s
submission that because a joint proceeding with all group members as plaintiffs
would not involve
a “bifurcated” process for determining individual
issues it would therefore be more efficient. No analysis was directed
to that
point. Furthermore, Part 4A contains specific provisions for dealing with
individual issues (see in particular ss 33Q, 33R
and 33S). Even if the
proceeding were to be de-classed under s 33N after the determination of the
common questions,[46] it does not
follow that the dispute resolution process would, overall, be less efficient
than the defendants’ vaguely described
omnibus proceeding. On this issue
I respectfully agree with the observations of the Full Court of the Federal
Court in
Mutch.[47]
48 The
gain in efficiency that the defendant would seek by reference to a hypothetical
jointly conducted alternative (non-representative)
proceeding is in substance
the elimination of the possibility that the group members could later bring
claims of the kind foreshadowed
in pre-litigation correspondence. On this
application there was no analysis of specifically how the Ashun form of
estoppel would apply to those claims. The defendant assumed that such claims
would be excluded in that way, if not brought
in alternative proceedings issued
otherwise than under Part 4A. That assumption might be correct but in the
absence of any submission
about it no more need be
said.
49 Putting the question of speculation to one
side, even if the proper comparator is the commencement of a joint proceeding
that would
ameliorate the prospect of subsequent claims being brought by the
same claimants, that such a proceeding might be more efficient
does not
establish that the existing proceeding will not provide an efficient and
effective means of dealing with the claims of group members. Given the
speculative nature of the defendant’s preferred counter-factual and the
clear utility of the present proceeding
as it appears on the material before me,
reference to a comparator proceeding does not establish the efficiency ground,
or that an
order under s 33N would be in the interests of justice for this
reason.
50 Furthermore, the efficiency
considerations invoked by the defendant, which rely on the risk of the
prosecution of un-pleaded claims,
fail to engage with the fact that
“efficiency” as it is understood in the context of Part 4A, must
comprehend the essential
proposition that the Part 4A mechanism is not intended
to eliminate individuality of claims, even within a proceeding (as to which,
see
below, under s 33N(1)(d)).
The alternative ground – s 33N(1)(d)
51 The defendants’ case on the
alternative ground was put this way: GM Holden is exposed to two risks or
detriments it would
not otherwise face were the proceeding de-classed and claims
brought in a non-representative form (whether individually or in some
form of
joint proceeding). The risks, as explained, are those of the same group members
later bringing different claims related
to the same subject matter, and the fact
that the defendant cannot employ offers of compromise against the group members.
I do not
consider that either of those factors or both in combination, establish
that it is otherwise inappropriate that the group members’
claims be
pursued by means of a group proceeding and for that reason it is in the
interests of justice to de-class this
proceeding.
52 First, to the estoppel point. As the
plaintiff submitted, Part 4A by design, contemplates multiple
actions.[48] As the plaintiff put
it, in the context of a group proceeding the defendant does not get the benefit
of an Anshun estoppel against group members in respect non-common issues
(and by necessary implication, claims that have not been brought by the
plaintiff) because that was the legislature’s
intention.[49]
53 That
being so, it is difficult to see how an intended characteristic of all group
actions might form the basis of an order disentitling
group members to
participate in the statutory form of action. Whilst I see no need to propound a
generally applicable rule, there
is force in the plaintiff’s submission
that for this reason, the fact that the group members may have other claims that
do
not form part of the subject matter of the group proceeding will rarely if
ever, satisfy the requirements of ss 33N(1)(c) or
(d).
54 Furthermore, reflection on the essential
structure of Part 4A exposes the point that while the defendant’s
interests are
a relevant consideration for the purposes of determining where the
interests of justice lie, seeking to eliminate the prospect of
subsequent
individual claims in this way fails to read s 33N in its statutory context by
failing to have regard to the essential
purpose of Part 4A as disclosed by its
terms. As Gordon J said in
Timbercorp:[50]
Pt 4A expressly contemplates and provides for the individuality of claims within a group proceeding. For example, a group proceeding may be commenced “whether or not the relief sought ... is the same for each person represented” and whether or not the proceeding “is concerned with separate contracts or transactions between the defendant and individual group members”, or “involves separate acts or omissions of the defendant done or omitted to be done in relation to individual group members”.
These conditions in s 33C are central to the scheme set out in Pt 4A. The purpose of commencing a group proceeding is so that a substantial common question of law or fact can be decided for at least seven persons whose claims involve the same, similar or related circumstances. Section 33C expressly recognises that each group member may, as an individual, have different claims against the defendant, but the foundation of the group proceeding is that they all have an interest in the resolution of a substantial common question of law or fact.
That the focus of the group proceeding is on answering a common question of law or fact and is representative is reinforced by other provisions in Pt 4A.
(citations omitted)
55 As Finkelstein J said in Bright v
Femcare, “there will be cases where a representative proceeding will
not resolve all issues in
dispute”.[51]
56 The
defendant’s submission that its exposure to potential further claims
establishes that it is in the interests of justice
to disallow the continuance
of this claim, is an over-reach and a reading of the “interests of
justice” criterion within
s 33N which appears to be at odds with the
statutory context within which s33N sits, particularly in this case where,
prima facie, the proceeding appears on the material available at this
stage, to have real utility in advancing the common issues, for the reasons
discussed.
57 Like observations may be made in
respect of the Order 26 point, which is rejected on substantially the same
grounds. The legislature
did not provide a mechanism by which offers of
compromise in that form may be served on group members. The defendant’s
inability
to deploy such offers is, in the broad, evaluative assessment required
under s 33N(1)(d), insufficient to establish that in the circumstances,
it is
inappropriate that the proceeding continue as a group proceeding. Furthermore,
as explained at the outset, the focus of both
ss 33N(1)(c) and (d) is the claims
of the group members. I am not persuaded that the absence of the Order 26
mechanism in Part 4A
makes it inappropriate that the group
members’ claims be pursued under Part 4A. The defendant’s
proposition does not sufficiently engage with the statutory language. Finally,
as a matter of fact, the defendant’s inability to deploy offers of
compromise did not establish that it will be practically
unable to otherwise
advance its interests in pursing settlement.
The individual proceedings ground – s 33N(1)(b)
58 The defendant submitted that there was
no suggestion that without a group proceeding the group members would be unable
to advance
their claims against the defendant. That proposition was not
contested. The plaintiff accepted that subsection 33N(1)(b) was established,
but said that fact did not establish without more, that it was in the interests
of justice to make a de-classing order. Those considerations
that would
constitute something more, have been already addressed. I accept that
submission.
59 The two cases upon which the
defendant relied as approximating the facts in this case,
McLean v
Nicholson[52] and Larsson v
Wealthsure Pty Ltd,[53]
cannot be regarded as establishing any particular propositions in respect of
group proceedings comprising small, closed classes.
The reasoning in each is,
with respect, scant, and McLean ought be regarded as turning on its very
particular facts.
Part C: Statement of Claim – Strike Out Application
Sub-paragraph 5(f)
60 The defendant has applied to strike
out sub-paragraph 5(f) of the statement of
claim.
61 There, the plaintiff alleges that
“General Motors Company, or one of its subsidiaries decided in 2017 to
retire the Holden
brand”. In argument the defendant said that the
offending part of the pleading was the reference to the date of the
decision.
62 Sub-paragraph 5(f) is one element of a
series of facts the plaintiff describes as background comprising a permissible
pleading
by way of context. The facts set out in paragraph 5 are otherwise
uncontentious. They are stated simply and concern the relevant
history of the
General Motors Company.
63 The sub-paragraph will be
struck out for these reasons:
(a) As the plaintiff admits, it alleges a fact that is not a material fact.
(b) A pleading of a non-material fact may be generally permissible by way of context in contemporary pleading, but at the same time, it is recognised that a pleading which contains an unnecessary or irrelevant allegation may be embarrassing.[54]
(c) I accept the defendant’s submission that the pleading may cause the wastage of time and costs, including because it may found applications for discovery. The substance of the plea is the making of a decision by the defendant to retire the brand at a particular time. The making of that decision is anterior to the conduct the subject of the pleaded cause of action and is accepted not to be relevant to it. At the same time, I accept that the making of the decision may well be an issue of some factual complexity as far as the defendant is concerned.
(d) Although the potential prejudice caused by the presence of the allegation may be mitigated by refusing discovery in respect of it, the better course is not to permit the allegation given that it is not material, and the plaintiff has not demonstrated any reason why it needs to remain in the pleading. The plaintiff may and in fact does otherwise allege that the defendant announced the retirement of the Holden brand and did in fact retire the Holden brand. The omission of reference to the making of the decision to do so may be struck out without prejudice to the plaintiff’s claim as otherwise articulated.
Particulars to paragraph 27
64 The defendant sought further and better particulars of the plaintiff’s allegation that it and the group members have suffered loss and damage as a result of the defendant’s breaches of contract. The statement of claim does not particularise that loss, but does provide a schedule which sets out for the plaintiff and each group member, the anticipated demand for vehicles over the relevant period and the number of vehicles actually supplied. I accept that the defendants are entitled to particulars of loss, in the first instance in relation to the plaintiff’s claim. However, as the defendant accepted in argument, the question is one of timing. I accept the plaintiff’s submission that now is not the appropriate time to require that particularisation. The plaintiff has indicated that it expects to prepare expert evidence on the question of its loss. The point at which that evidence is advanced may be an appropriate time to revisit that question. If circumstances change and the defendant can demonstrate that as a matter of practicality it requires particulars in respect of either the plaintiff or group members’ losses (for example, in preparation for mediation or trial) the question may be revisited.
Paragraph 11(C) – Term implied by custom or usage
65 As noted earlier, the plaintiff alleges that a term was implied in the dealer agreement, as follows:
It was a term of the Agreement that the Defendant would ensure the availability for supply of new Holden brand motor vehicles or a substitute thereto for the Term (the Implied Term).
66 The term is alleged to have been implied on the basis that it is necessary to give business efficacy to the contract and also (at sub-paragraph 11(C)), implied “on the basis of custom or usage in the Australian car dealership industry”. The defendant has applied to strike out sub-paragraph 11(C). Objection is taken to the adequacy of the pleading of “custom or usage”. The defendant says that:
(a) The implication of a contractual term by custom or usage is a question of fact in respect of which the alleging party bears the onus of proof.[55]
(b) Accordingly, a pleading of a term implied by custom or usage must include the material facts necessary to establish the basis for that allegation, and provide adequate particulars thereto.[56]
(c) Here, the pleading is in effect a bare conclusion from unstated facts and for that reason, is embarrassing.[57] The pleading has significance in the dispute and if not properly particularised has the potential to significantly expand the scope of the factual inquiry in relation to both evidence and discovery. It is important to properly define the issues.
67 The basis of the application is then,
that the allegation is insufficiently
particularised.
68 The propositions stated in
sub-paragraphs (a) and (b) above are evidently correct and were not in contest.
To those propositions
the following may be added, for the purpose of this
dispute:
(a) the function of a pleading in civil proceedings is to alert the other party to the case they need to meet (and hence satisfy basic requirements of procedural fairness) and further, to define the precise issues for determination so that the court may conduct a fair trial;[58]
(b) pleadings, when well-drawn, serve the overarching purpose of the Civil Procedure Act 2010 (Vic);[59]
(c) every pleading must contain in a summary form a statement of all material facts upon which the party relies, but not the evidence by which the facts are to be proved (r 13.02(1)(a));
(d) particulars are intended to fill in the picture of the plaintiff’s cause of action (or defendant’s defence) with information sufficiently detailed to put the other party on guard as to the case that must be met.[60] An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried;[61]
(e) the power to strike out a pleading is discretionary. As a rule, the power will be exercised only when there is some substantial objection to the pleading complained of or some real embarrassment is shown;[62]
(f) Particulars do not contain material facts.[63] They are the pieces of information that are necessary to prove the material facts.[64] Particulars serve a distinct purpose – to clarify and confine the scope of issues, or as Isaacs J put it in R v Associated Northern Collieries, to avoid the other party being “surprise[d]”.[65] The circumstances in which particulars are required are codified in Rule 13.10 of the Rules:[66]
1. Every pleading shall contain the necessary particulars of any fact or matter pleaded.
2. Without limiting paragraph (1), particulars shall be given if they are necessary:
- to enable the opposite party to plead;
- to define the questions for trial; or
- to avoid surprise at trial.
(g) In considering objections on the ground of embarrassment (as the Victorian Court of Appeal said in Uber Australia Pty Ltd v Andrianakis):[67]
The Court should stand back and consider the pleading as a whole and in that light ask: does the case alleged give clear notice of the case to be met at trial?
This modern approach to applications to strike out pleadings on the ground that they are embarrassing is reflected in this Court’s decision in CA Ballan, where the Court stated that, while important, pleadings are primarily used ‘to help the parties define the real issues in dispute’, while bearing in mind that pleadings are ‘procedural tools only’.
(citations omitted)
69 The plaintiff submitted that:
(a) First, in order to prove a term implied by custom or usage the plaintiff must establish by evidence that the ‘custom or usage’ is so well known and acquiesced in that everyone making a contract in those circumstances can reasonably be expected to be presumed to have imported that term into the contract.[68]
(b) Secondly, for pleading purposes the plaintiff must allege the term said to have been implied; that the term is implied by custom or usage; and the trade, profession or industry in which the custom or usage exists. The plaintiff has pleaded those matters. There is no authority that suggests that more is required. The 13th Edition of Bullen & Leake & Jacob’s Precedents of Pleading sets out the requirements for a term implied by custom and usage, consistently with that description.[69]
(c) Thirdly, custom or usage is ordinarily proved by evidence at trial. The plaintiff intends to lead expert evidence from one or more experts.
(d) Fourthly, the defendant’s real complaint appears to be that the allegation will expand the scope of the factual inquiry. That is not a basis on which to strike out the allegation.
70 I accept that there is no authority
that establishes that for the purposes of establishing the necessary elements of
the relevant
part of the cause of action (the existence of a contractual term),
the plaintiff must plead additional elements going to the basis
of the
implication of the term. In fact, there is no authority that the parties or my
chambers have been able to identify that is
of assistance specifically on the
question of pleading in this context. I also accept that, subject to one caveat
which I will mention
shortly in relation to the way that the term has been
pleaded, the plaintiff has pleaded the relevant material facts which are that
the alleged term was to be implied, and it was to be implied on the basis of
custom or usage in the relevant industry.
71 As the
propositions set out above indicate, particulars fulfill a different function in
a pleading from the purpose served by the
requirement to plead material facts.
They clarify, confine and define the issues for trial. In contemporary
language, they help
the parties define the real issues in
dispute.
72 Although the plaintiff’s pleading
in this case is properly directed to the relevant term and the basis for its
implication,
the factual proposition that it advances, is the existence, in the
Australian car dealership industry, of the custom or usage. I
accept the
defendant’s submission that the allegation that the term was implied,
“on the basis of custom or usage in the Australian car dealership
industry” states the relevant fact in what appears to be a
conclusionary way. The question is what flows from
this.
73 Implication by custom or usage is in effect
a short hand way of describing both a proposition of fact, and a legal
conclusion.
It is unnecessary to traverse the relevant substantive law on the
implication of contractual terms in this way for present purposes,
save to note
that whilst it is the subject of some uncertainty, the High Court in
Con-stan Industries of Australia Pty Ltd v Norwich Winterthur
Insurance (Aust) Ltd[70]
summarised the requirements for establishing (as opposed to pleading) custom or
usage as follows:[71]
(a) The existence of custom or usage that will justify the implication of a term into a contract is a question of fact (first proposition).
(b) There must be evidence that the custom [or usage] relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract...In the words of Jessel MR in Nelson v. Dahl, approved by Knox CJ in Thornley v. Tilley:
[the custom] must be so notorious that everybody in the trade enters into a contract with that usage as an implied term. It must be uniform as well as reasonable, and it must have quite as much certainty as the written contract itself.[72]
However, it is not necessary that the custom be universally accepted, for such a requirement would always be defeated by the denial of one litigant of the very matter the other party seeks to prove in the proceedings (second proposition).(c) A term will not be implied into a contract on the basis of custom [or usage] where it is contrary to the express terms of the agreement (third proposition).
(d) A person may be bound by a custom notwithstanding that he had no knowledge of it...nothing turns on the presence or absence of actual knowledge of the custom; that matter will stand or fall with the resolution of the issue of degree of notoriety which the custom has achieved (fourth proposition).
(citations omitted)
74 It is instructive for present purposes
to pay attention to the High Court’s second proposition. What must be
established
(relevantly) is that the custom or usage – which is the
custom of implying the term – was “so well-known and acquiesced
in that everyone making a contract in that situation can reasonably be presumed
to
have imported that term into the contract”. In essence, it is required
to establish notoriety of the practice of implying
the
term.
75 In the case of Majeau Carrying
Co Pty Ltd v Coastal Rutile
Ltd,[73] Stephen J endorsed
Darley CJ’s statement in Anderson v Wadey
that:[74]
Seeing that custom is only to be inferred from a large number of individual acts, it is evident that the only proof of the existence of a usage must be by the multiplication or aggregation of a great number of particular instances; but these instances must not be miscellaneous in character, but must have a principle of unity running through their variety and that unity must shew a certain course of business and an established understanding respecting it.
(emphasis added).
76 Another way of expressing custom or
usage in this context then, is that it is a course of business and an
established understanding in respect it.
77 If
the gravamen of custom or usage is a practice or a course of business
within a particular industry, of implying a term of a particular kind into
contracts of a particular
kind and an established understanding or notoriety in
respect of that course of business, it can readily be seen that because of
the
constructs with which it engages, an allegation of custom or usage may be made
in both broad and succinct terms.
78 To illustrate
one way of expressing such a pleading, in Majeau Carrying Co., a
warehouseman refused to deliver goods stored at its warehouse on the grounds
that the customer had significant unpaid sums for
storage. The warehouseman
claimed that it was entitled to hold the goods on the basis that it had a
general lien over them. It
said that the lien was a common law right or
established by custom or usage. The reported decision did not concern the
question
of pleading, but the claim was particularised in this
way:[75]
At all material times in the State of Queensland persons dealing with and engaged in the trade or business of warehousemen recognized and observed the right of a warehouseman, (in the event of failure of the depositing owner to pay the warehouseman’s charges in relation to the storage of goods deposited by him with the warehouseman), to retain the possession of such goods until the payment in full to the warehouseman of all monies owned by the said owner to the warehouseman.
79 The point at which the allegation of
primary fact is further elaborated is, in this case, essentially a question of
timing and
case management. It appears to me that the impediment to
particularising the pleading in this context in a manner that does not
appear to
be conclusionary, is that once one moves beyond asserting the fact that the
course of business or custom within the particular
industry and geographic
location was to recognise the right or term in question, it is likely to become
difficult if not impossible
to distinguish between particulars and evidence. I
make this point not because I wish to emphasise in this context the significance
of the technical distinction between particulars and evidence (noting that
particulars may be given notwithstanding that they might
disclose the
parties’ evidence), but in recognition of the practical difficulties that
I consider are likely to attend the
more detailed particularisation of the
custom or usage at a time before the preparation of the evidence that
will support the claim. In response to an allegation that in a particular
industry a custom of recognising a right (a contractual
term) existed, one is
invited to ask, “what was the course of business that established the
custom?”, and “by whom
was it understood, and how?”.
Questions of that kind might properly be described as requests for
evidence.
80 In light of those considerations, I
consider that the plaintiff’s paragraph 11(C) should be re-drawn:
(a) to more directly identify the term, which should be pleaded by reference to the custom or usage in the industry, rather than by reference to the contracts in this case; and
(b) to more particularly define the reach and definition of the industry, in particular to confine, confirm or define its geographic dimensions and to identify whether or not it is intended to include the defendant in that description.
81 I would not expect that those changes
would substantially alter the present
pleading.
82 It is implicit that I consider that if
amended in that way the pleading will sufficiently define the issues for this
stage of the
proceeding, and put the defendant on notice of the claim to a
sufficient extent. Recognising that pleadings are a procedural tool,
beyond
that, the provision of the plaintiff’s evidence is the appropriate means
by which the content of the course of dealings
which are said to establish the
custom or usage will be “filled in”. Once the evidence has been
prepared, consideration
will be given to the need to further particularise the
claim to set out the facts underpinning the relevant course of business and
its
notoriety.
83 This is in my view the most
appropriate way to assist the parties to define the real issues in dispute.
Requiring the plaintiff
to further plead at this point would likely lead
to wasted costs.
84 There is no suggestion that the
defendant cannot plead to the claim (even in its present form). In managing the
proceeding, I
will allow the defendant sufficient time to put on its evidence on
this question, after receipt of the plaintiff’s evidence
and the provision
of any further particulars at that time. That issue can be addressed when it
arises.
85 The question of discovery can and will be
managed in the context of any particular request by either party of the
other.
86 I consider the course I propose to be
consistent with the overarching
purpose.[76]
87 It
follows that I will strike out paragraph 11(C) but for different and less
substantive reasons than those upon which the defendant
relies, and will direct
the plaintiff to re-plead that part of its claim.
---
[1] ISG Management Pty Ltd v Mutch (2020) 385 ALR 146, 149-50, [14] (White, Lee and Derrington JJ).
[2] AS v Minister for Immigration & Ors (Ruling No 7) [2017] VSC 137 (J Forrest J), [61] (AS); Andrianakis v Uber Technologies (Ruling No 1) [2019] VSC 850, [157] (Macaulay J) (Uber Ruling No 1); Bright v Femcare Ltd [2002] FCAFC 243; (2002) 195 ALR 574, 601 [128] (Kiefel J) (Bright v Femcare).
[3] ISG Management Pty Ltd v Mutch (2020) 385 ALR 146, 150, [15] (White, Lee and Derrington JJ).
[4] P Dawson Nominees Pty Ltd v Multiplex Funds Management Ltd [2007] FCA 1061; (2007) 242 ALR 111, 116 [21] (Finkelstein J) (Multiplex (First Instance)).
[5] Bright v Femcare, 601 [130] (Kiefel J).
[6] Bright v Femcare, 601 [128] (Kiefel J).
[7] Bright v Femcare, 588 [74] (Lindgren J).
[8] Multiplex Funds Management Ltd v P Dawson Nominees Pty Ltd [2007] FCAFC 200; (2007) 164 FCR 275, 293 [121] (Jacobson J) (Multiplex (Full Court)).
[9] Multiplex (Full Court), 300 [199]-[200] (Jacobson J); Mutch v ISG Management Pty Ltd [2020] FCA 362, [9] (Bromberg J) (Mutch (First Instance)).
[10] Uber Ruling No 1, [158].
[11] (2020) 385 ALR 146
(Mutch), concerning the Federal analogue of Part 4A, namely Part
IVA of the Federal Court of Australia Act 1976 (Cth) which is in
substantively the same terms, and relevantly identical terms for present
purposes.
[12] Mutch,
150-51 [17].
[13] See for example Uber Ruling No 1; AS; Multiplex (First Instance).
[14] See Mutch at [34].
[15] See generally the observations of Beach J in Stack v AMP Financial Planning Pty Ltd (No 2) [2021] FCA 1479 at [21] (Stack).
[16] Bright v Femcare, 588-89 [74] (Lindgren J).
[17] See for example, Stack, [26]; Multiplex (Full Court), 293-4 [127]-[133] (Jacobson J) as cited in AS at [53].
[18] Uber Ruling No 1, [160]; Multiplex (Full Court), 294 [131] (Jacobson J).
[19] Multiplex (Full Court), 293 [124] (Jacobson J).
[20] Multiplex (Full Court), 294 [131] (Jacobson J).
[21] Stack, [26]; AS at [53] and the cases cited there; see also Bright v Femcare, 601 [128]-[130] (Kiefel J).
[22] Bright v Femcare, 576 [5] (Lindgren J).
[23] Stack, [26].
[24] Multiplex (Full Court), 277 [1] (French J).
[25] Multiplex (Full Court), 294 [132]-[33] (Jacobson J).
[26] Multiplex (Full Court), 292-3 [120] (Jacobson J).
[27] Mutch, 150 [16].
[28] Stack, [37].
[29] Mutch, 151 [21] and the authorities there cited.
[30] Uber Ruling No 1, [162]; Bright v Femcare, 605-6 [152] (Finkelstein J).
[31] Multiplex (Full Court), 299 [191] (Jacobson J).
[32] Timbercorp Finance Pty Ltd v Collins (2016) 259 CLR 212, 246 [104]-[105] (Gordon J); AS, [40].
[33] See for example, Bright v Femcare at 581 [21] (Lindgren J).
[34] See for example, Brisbane Broncos Leagues Club v Alleasing Finance Australia Pty Ltd [2011] FCA 106, [88]-[89] (Jacobson J).
[35] AS at [67]-[70], citing AS v Minister for Immigration and Border Protection [2014] VSC 593 (Kaye J).
[36] AS, [67]; Bright v Femcare, 580 [18] (Lindgren J); cf McLean v Nicholson [2002] VSC 446 ; (2002) 172 FLR 90, where Bongiorno J granted an application pursuant to s 33N prior to the filing of a defence.
[37] Mutch, 154 [29].
[38] See for example Bright v Femcare, 580 [18] (Lindgren J), 605 [149] (Finkelstein J); AS, [69] citing Kaye J in AS v Minister for Immigration and Border Protection [2014] VSC 593 at [64]- [65].
[39] No point was taken in relation to any privilege attaching to evidence of settlement negotiations.
[40] (2016) 259 CLR 212 (Timbercorp).
[41] Jenkings v Northern Territory of Australia [2017] FCA 1263, [95] (White J); The Owners – Strata Plan No 87231 v 3A Composites GmbH (No 3) [2020] FCA 748, [258] (Wigney J); Mutch (First Instance), [13] (Bromberg J); Rickhuss v The Cosmetic Institute Pty Ltd [2018] NSWSC 1848, [80]-[87] (Garling J).
[42] Wigmans v AMP Ltd [2021] HCA 7; (2021) 388 ALR 272, 293 [82] (Gageler, Gordon and Edelman JJ); Timbercorp, 247 [108] (Gordon J); Timbercorp 235, [50] (French CJ, Kiefel, Keane and Nettle JJ).
[43] See Timbercorp, 235 [50] (French CJ, Kiefel, Keane and Nettle JJ).
[44] Bright v Femcare, 601 [128] (Kiefel J).
[45] See for example, AS, [65].
[46] See Zhang De Young v Minister for Immigration, Local Government and Ethnic Affairs [1993] FCA 489; (1993) 45 FCR 384 (French J) as cited in Bright v Femcare, 601 [129] (Kiefel J).
[47] Mutch, 156-7 [40]-[1].
[48] Wigmans v AMP Ltd [2021] HCA 7; (2021) 388 ALR 272, 293 [82] (Gageler, Gordon and Edelman JJ); Timbercorp, 246 [105] (Gordon J); Timbercorp 235, [50] (French CJ, Kiefel, Keane and Nettle JJ).
[49] Timbercorp, 235 [50] (French CJ, Kiefel, Keane and Nettle JJ).
[50] Timbercorp, 246 [104]-[106] (Gordon J).
[51] Bright v Femcare, 606 [153]; see also AS at [40], [46].
[52] [2002] VSC 446 ; (2002) 172 FLR 90 (McLean).
[54] See for example, SMEC Australia Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd (No 2) [2011] VSC 492, [28]-[31] (Vickery J).
[55] Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd [1986] HCA 14; (1986) 160 CLR 226, 236-8 (Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ) (Con-Stan).
[56] Goldie v Getley (No 2) [2010] WASC 66, [88] (Simmonds J) (and the authorities there cited).
[57] Uber Australia Pty Ltd v Andrianakis [2020] VSCA 186; (2020) 61 VR 580, [50] (Niall, Hargrave and Emerton JJA).
[58] The function of defining issues for trial is required from an early stage. Otherwise, discovery and other interlocutory process are likely to be misdirected: Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd & Ors [1996] FCA 1758; [1996] ATPR 41-522 at 42 (Burchett J).
[59] Ibid, [9].
[60] Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279, 286 (Mason CJ and Gaudron J).
[61] Clarke v Great Southern Finance Pty Ltd [2010] VSC 473; (2010) 243 FLR 451, 455 [9] (Croft J) (Clarke).
[62] Clarke, 456 [11].
[63] Rubenstein v Truth & Sportsman Ltd [1960] VicRp 75; [1960] VR 473 (Adam J), 476 and the cases cited there; TPC v David Jones (Aust) P/L [1985] FCA 228; (1985) 7 FCR 109, 113-14 (Fisher J) and the cases cited there.
[64] Bruce v Oldhams Press Ltd [1936] 1 KB 697, 712-13 (Scott LJ).
[65] (1910) 11 CLR 738, 740-41.
[66] Rule 13.10(3)-(6) set out specific requirements for certain types of claims, which are not relevant for present purposes.
[67] [2020] VSCA 186; (2020) 61 VR 580 (Niall, Hargrave and Emerton JJA), 600-01 [52]-[53], and the cases cited there.
[68] Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd [1986] HCA 14; (1986) 160 CLR 226, 236-8 (Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ).
[69] Jacob and Goldrein (eds), Bullen & Leake & Jacob’s Precedents of Pleadings (Thomson Sweet & Maxwell, 13th edition), 303.
[70] [1986] HCA 14; (1986) 160 CLR 226 (Con-Stan).
[71] Con-Stan, 236-8. As subsequently endorsed by the High Court in Byrne v Australian Airlines Limited (1995) 185 CLR 410, 423 (Brennan CJ, Dawson and Toohey JJ), 440 (McHugh and Gummow JJ) (Byrne); Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169, 186 n 90 (French CJ, Bell and Keane JJ).
[72] Citing Jessel M.R. in Nelson v Dahl [1879] UKLawRpCh 291; (1879) 12 Ch. D 568, 575, as approved by Knox CJ in Thornley v Tilley [1925] HCA 13; (1925) 36 CLR 1, 8.
[73] Majeau Carrying Co. Pty Ltd v Coastal Rutile Limited (1973) 129 CLR 48 (Stephen J, Gibbs CJ and Menzies J agreeing) (Majeau Carrying Co.).
[74] Majeau Carrying Co., 61 (Stephen J) citing Anderson v Wadey [1899] NSWLawRp 84; (1899) 20 LR (NSW) 412, 417-18 (Darley CJ).
[75] Majeau Carrying Co, 53.
[76] Civil Procedure Act 2010 (Vic) s 7-9.
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