FEDERAL COURT OF AUSTRALIA

Watson v AWB Limited [2007] FCA 1367

PRACTICE AND PROCEDURE – whether an existing proceeding can be converted into a Pt IVA representative proceeding by way of amendment

Federal Court of Australia Act 1976 (Cth), Pt IVA, s 33A, s 33C 

Finance Sector Union of Australia v Commonwealth Bank of Australia (1999) 89 FCR 417 doubted but followed

Sreika v Cardinal Financial Securities Limited [2000] FCA 1647 doubted but followed 

JOHN WATSON AND KAYE WATSON IN THEIR OWN RIGHT AND AS REPRESENTATIVES OF THE REPRESENTED PERSONS v AWB LIMITED (ACN 081 890 459)

NSD 659 OF 2007

GYLES J

22 AUGUST 2007

SYDNEY

THE COURT ORDERS THAT:

1.                  The applicants be granted leave to file:

(a)                The Further Amended Application in the form of annexure BJS-7 to the affidavit of Ben Slade affirmed on 14 August 2007 and filed in support of the motion dated 14 August 2007; and

(b)               The Further Amended Statement of Claim in the form of annexure BJS-8 to the affidavit of Ben Slade affirmed on 14 August 2007 and filed in support of the motion dated 14 August 2007.

2.                  The respondent’s costs of the motions up to today be paid by the applicants, but the costs of today be the applicants’ costs in the cause.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     The question for decision is whether an existing proceeding in the Court, which is not filed as a proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (the Act), can, by way of amendment, be converted into such a proceeding.  This depends upon the construction of s 33C of the Act, which, so far as is relevant, reads:

“(1)     Subject to this Part, where:

(a)        7 or more persons have claims against the same person; and

(b)        the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and

(c)        the claims of all those persons give rise to a substantial common issue of law or fact;

a proceeding may be commenced by one or more of those persons as representing some or all of them.

(2)       A representative proceeding may be commenced …”

(Emphasis added.)

“Commenced” and “commences” also appear in s 33A.

2                     It is submitted for the respondent that this proceeding has already “commenced” and cannot be “commenced” again under Pt IVA.  It is put on behalf of the applicants that the matter is covered by authority and, in particular, the decision of O’Connor J in Finance Sector Union of Australia v Commonwealth Bank of Australia (1999) 89 FCR 417, that decision having been referred to with approval by Tamberlin J in Sreika v Cardinal Financial Securities Limited [2000] FCA 1647.  The respondent submits that the decision in Sreika [2007] FCA 1647can be distinguished because the history of the proceeding was different, it having been intended to have been commenced as a representative proceeding – it was, thus, simply a question of a wrong form being used. 

3                     It seems to me that the decision of O’Connor J is directly in point.  It also seems to me that the distinction sought to be drawn in relation to Sreika [2007] FCA 1647is unconvincing.  If the point made by the present respondent is correct, and a proceeding is only commenced once, then I do not think that Sreika [2007] FCA 1647 can be distinguished in the way to which counsel for the respondent refers.  It is also clear enough that the basic proposition which is in issue here was in issue in those cases.  It was not as if the decisions were made without regard to there having been a question to be determined.  Quite what the actual substance of the argument was in those cases is not to the point.  I should say that those cases are referred to in the commentaries as authorities for the proposition that there can be conversion of an existing proceeding to a Pt IVA proceeding.  Thus, in order to accede to the respondent’s opposition to this amendment based upon lack of power, I would have to find that both of those decisions were plainly wrong.

4                     The argument presented for the respondent has much to commend it.  The approach, slightly over simplified, is that you can only have one “commencement” of a proceeding – once commenced, always commenced.  It is said that it makes no sense at all that something can be commenced more than once.  A reading of s 33C of the Act in the light of s 33A supports the respondent’s position, without a very subtle reading of both sections.  Also, the other provisions of Pt IVA seem to me to assume that a proceeding under that Part cannot also be a proceeding of another nature.  That is not to say that Pt IVA is a complete code for the conduct of the case, but it is to say that a Pt IVA proceeding is sui juris and not to be joined with any other kind of proceeding.  That last point is not something which arises at this stage of the case.

5                     However, without reproducing all of the arguments put by the applicants, it does not seem that they can make good their argument unless the view is taken that s 33C does not, as counsel put it, amount to a procedural definition of how things are to take place, but rather describes what must have taken place for the proceeding to be under the Part.  Put another way, if the amendment here is granted, then a proceeding under Pt IVA, which does not exist at the moment, will exist and so be “commenced” once the amendment is made.  To so conclude does not raise the question as to whether or not the backdating of an amendment to the commencement of the proceeding is part of that process.

6                     I cannot say that that the applicants’ argument is without merit.  It may well be correct.  It does not appear to have been referred to in terms by O’Connor J or by Tamberlin J who have, rather, concentrated upon what might be called the practicalities of the situation.  Because of the brevity of the reasoning, particularly in Finance Sector Union 89 FCR 417, it cannot be said that this basis could not have been behind it.  Therefore, I am not able to conclude that the decisions relied upon by the applicants are clearly wrong, although I have considerable doubt about their correctness.  In view of that conclusion, I allow the amendment.  Whether or not the applicants wish to pursue the amendment is a matter for them. 

7                     There is no doubt that, in general principle, the parties seeking an amendment should pay the costs occasioned by that amendment.  However, this is an unusual situation for the reasons that have been mentioned.  The costs of the motion up to today should be borne by the applicants, but the costs of today should be their costs in the cause.

Associate:

Dated:         31 August 2007