FEDERAL COURT OF AUSTRALIA

Paxtours International Travel Pty Ltd v Singapore Airlines Ltd [2012] FCA 426

THE COURT ORDERS THAT:

1.    The interlocutory application, filed on 29 March 2012 by Webjet Marketing Pty Ltd, be dismissed.

2.    Webjet Marketing Pty Ltd pay Singapore Airlines Limited’s costs of the interlocutory application.

3.    There be no order in respect of the applicant’s costs of the interlocutory application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction

1        By an interlocutory application filed on 29 March 2012 Webjet Marketing Pty Ltd (Webjet) sought the following interlocutory orders:

1.    Pursuant to section 33ZF and/or, alternatively, section 22 of the Federal Court of Australia Act 1976, an order that Webjet Marketing Pty Ltd ACN 063 430 848 (Webjet) be reinstated as a group member (within the meaning of s 33A of the Federal Court of Australia Act), or be permitted to withdraw its notice of opt-out (filed in Court on or about 3 March 2008), in these proceedings and be included in the list of group members who have registered an intention to make a claim against the First Respondent.

2.    For the avoidance of doubt, an order pursuant to ss 33ZB and/or 33ZF of the Federal Court of Australia Act, that the Applicant to this interlocutory application, Webjet, is affected by and bound by orders made by the Court in the hearing of the application to the approval of the settlement of the proceeding on 29 March 2012.

3.    Order 3 of the Applicant's proposed approval orders (dated 29 March 2012), as against Singapore Airlines Ltd and Cathay Pacific Airways Limited, be varied so that any declaration made pursuant to that order (or orders) is (or are) made without prejudice to Webjet's position pending the determination of this interlocutory application.

4.    Such further or other orders as the Court thinks fit.

2        As appears below, an order to the effect of paragraph 3 of the interlocutory application was made on 29 March 2012 so that aspect of the matter required no further consideration.

3        On that date I also made orders for the filing of evidence and written submissions so that the interlocutory application could be heard on 24 April 2012.

4        The applicant in the substantive proceedings took a neutral stance on Webjet's interlocutory application: it filed no evidence and made no submissions.

The facts

5        A short chronology of relevant events is as follows.

6        On 7 May 2007 the originating process in this application was filed.

7        On 20 February 2008 Moore J made orders pursuant to s 33J(1) of the Federal Court of Australia Act 1976 (Cth) (the Federal Court of Australia Act) fixing 11 April 2008 as the date before which a group member in these proceedings may opt out. That date was subsequently extended to 23 April 2008. The “Notice to Group Members” stated that the proceedings would determine the rights, if any, of a Group Member to compensation, "unless you choose to opt out of the proceedings. If the action is unsuccessful, you will be bound by that result too". It continued:

If you are a Group Member, you have the right to exclude yourself (OPT OUT) from the proceedings. If you do NOT want to be part of the proceedings you must OPT OUT. In accordance with section 33J of the Federal Court Act 1976 (Cth) (the Act), the Court has fixed 4.00pm on 11 April 2008, as the time and date by which you must opt out of the proceedings.

. . .

If you are a Group Member and do not opt out the proceedings you will be bound by any judgement made in the proceedings. You will also be one of the Group Members on whose behalf the Applicant is conducting the proceedings.

8        By notice dated 3 March 2008 Webjet gave notice under s 33J that as “a group member in the above proceedings … it is opting out of this proceeding”. The notice was signed by Mr David Clarke, a director of Webjet, and Mr Rod Brandenburg, the company secretary.

9        On 17 June 2009 Moore J made orders on certain substantive issues in related proceedings: Leonie's Travel Pty Ltd v International Air Transport Assn (No 2) [2009] FCA 646.

10        On 4 May 2010 the Full Court decided Leonie’s Travel Pty Ltd v Qantas Airways Ltd (2010) 183 FCR 246; [2010] FCAFC 37.

11        On 19 July 2010 the Court made an order giving effect to the judgment of the Full Court in Leonie’s Travel. That order was:

1.    On the true construction of the PSA Agreement as in force between 11 May 2004 and the present date, and in particular section 9 of the Sales Agency Rules, as a consequence of the notifications by Qantas Airways Limited under the said PSA Agreement that commission was and is payable by Qantas on the sale of published fares for international air passenger transportation, the "fares applicable" (for the purposes of section 9.4.1(b), and (as at and from 1 March 2008) section 9.3.2 of the Sales Agency Rules) upon which commission has to be paid by Qantas to Leonie’s Travel Pty Limited and to each group member on the sale of such fares includes the fuel surcharge which was introduced by Qantas Airways Limited on 11 May 2004 and continues to this date.

12        On 3 September 2010, an application for special leave to appeal by Qantas Airways Ltd was refused by the High Court.

13        On 22 August 2011 an Amended Application and an Amended Statement of Claim were filed in the proceedings.

14        On 15 September 2011 an amended defence was filed by Singapore Airlines Limited (Singapore Airlines).

15        On 24 October 2011 the applicant filed a reply to the amended defence of Singapore Airlines.

16        As at 14 February 2012, Paxtours International Travel Pty Ltd (Paxtours) and Singapore Airlines had agreed, subject to the Court's approval, to settle the proceedings as between them on certain terms. Mr Steven Lewis said in an affidavit filed on 15 February 2012 that the settlement would mean that Singapore Airlines would pay 100 cents in the dollar of each group member’s claim for commission on the fuel surcharge component of the price paid for the sale in Australia of published fares for international travel together with interest thereon subject to any set-off defence which Singapore Airlines established.

17        On 15 February 2012 the Court made orders in relation to the settlement of the claim against Singapore Airlines. Persons entitled to participate in the settlement (if approved) were group members who had not opted out under s 33J of the Federal Court of Australia Act and who had delivered a duly completed Notice of Intention to Claim form to the solicitors for the applicant or the Court by 19 March 2012 or were otherwise agreed by the parties as being entitled to participate. The Court made orders for the publication of a notice to group members for the registration of their intention to participate in a settlement (if approved by the Court).

18        On 15 February 2012, Mr Steven Lewis, the solicitor for the applicant, caused a notice to be advertised in the Monday 20 February 2012 editions of Travel Daily and Travel Today. He also caused 1,164 notices to be sent by ordinary prepaid post to group members who had not previously opted out of the proceedings. The notices were lodged with Australia Post on 20 February 2012.

19        On 16 March 2012 Mr Noon, a director of Webjet signed and sent to the applicant’s solicitor a “Registration of Intention to Claim”. The notice said that Webjet “believes it is a group member in the above proceedings and wishes to register its intention to advance a claim for debt or damages against”, relevantly, Singapore Airlines.

20        On 19 March 2012 the solicitor for Paxtours wrote to the solicitors for Singapore Airlines to find out if Singapore Airlines would consent to Webjet being reinstated as a group member.

21        On 21 March 2012 Mr Lewis sent a letter to the Registrar of the Court enclosing a schedule of 30 group members and 29 notices received by Slater and Gordon by 4 pm on 19 March 2012 from group members who had not retained Slater and Gordon; the schedule of group members who had not retained Slater and Gordon; and the notice received from one group member Jettin Pty Ltd in respect of two IATA travel agencies which was received by Slater and Gordon on the morning of 20 March 2012. Mr Lewis also determined that two travel agents, Kiplee Pty Ltd and Webjet who lodged notices with Slater and Gordon opted out of the proceedings pursuant to orders of the Court made in 2008.

22        On 23 March 2012 there was filed in the Court a schedule of group members registering a claim. Mr Lewis determined from an inspection of those notices that one travel agent, Deltanine Pty Ltd, had previously opted out of the proceedings pursuant to orders made by the Court in 2008.

23        On 23 March 2012 Mr Luke Whiffen, an employed solicitor for Turks Legal, received instructions to act for Webjet in respect of making the interlocutory application filed on 29 March 2012.

24        On 29 March 2012 the Court made orders pursuant to ss 33V and 33ZF approving the settlement of the proceeding between the applicant, Paxtours, and Singapore Airlines on the terms set out in the Deed of Settlement, a copy of which was annexed to the affidavit of Steven Lewis sworn on 28 March 2012. The Court declared that the persons affected and bound by the orders were the applicant, Singapore Airlines as the first respondent and all other group members as defined in paragraph 2 of the Amended Application filed on 22 August 2011 who had not opted out under s 33J of the Act. But the Court noted that that order was without prejudice to Webjet’s interlocutory application which, as I have said, was filed on that day, 29 March 2012.

25        On 12 April 2012 Webjet discontinued its interlocutory application dated 29 March 2012 against the second respondent Cathay Pacific Airways Limited. This left as a respondent only Singapore Airlines.

26        Turning now from the chronology to other facts, in his affidavit sworn on 5 April 2012, Mr Noon states, at [10]:

Webjet wishes to avoid the cost and expense of commencing proceedings against Singapore Airlines for the recovery of commission on the fuel surcharge component of international published fares sold by Webjet on behalf of Singapore Airlines. If on the other hand this application for reinstatement is unsuccessful Webjet proposes to bring separate proceeding in the District Court of New South Wales.

27        Webjet says that it meets the eligibility criteria referred to in paragraph 2 of the Amended Application in that:

(a)    Between 11 May 2004 and 18 August 2011, for some or all of the time, Webjet carried on the business of a travel agent as a corporation, with its principal place of business within Australia;

(b)    Between 11 May 2004 and 18 August 2011, for some or all of the time, Webjet was a party to the IATA Passenger Sales Agency Agreement;

(c)    At some time between 11 May 2004 and 18 August 2011, Webjet sold international published fares in Australia on behalf of Singapore Airlines.

For the purpose of this application only, Singapore Airlines does not contend that Webjet was not:

(a)    a group member in the period between commencement of the action and the date on which it launched its opt out notice;

(b)    entitled to lodge an opt out notice in the proceeding;

(c)    had it not lodged an opt out notice, otherwise entitled to lodge a Notice of Intention to Claim thereby becoming an Eligible Group Member;

(d)    having become an Eligible Group Member, otherwise entitled to participate in the resolution scheme that has recently been approved by the Court,

subject to those limitations and restrictions which are identified in paragraphs 15 and 33 of Webjet's written submissions in support of its application.

28        The limitations and restrictions referred to in (d) above concern quantification of losses, including time running against Webjet in relation to part of its claim.

29        Mr Whiffen, solicitor for Webjet, in his affidavit sworn on 5 April 2012 said that if Webjet was not reinstated and commenced proceedings in the District Court for recovery, where the only issues were any alleged set-off and the quantification of Webjet’s claim, his estimate of costs was between $20,000 and $40,000. However, in circumstances where liability was disputed then he estimated the costs of such proceedings to be in the range of $80,000 to $120,000. No further detail was provided but these estimates were not disputed. I was asked to read the references to costs as being to Webjet’s estimated costs as between solicitor and client and I do so.

Part IVA of the Federal Court of Australia Act

30        The statutory provisions in Part IVA referred to in the interlocutory application are:

33A Interpretation

In this Part, unless the contrary intention appears:

group member means a member of a group of persons on whose behalf a representative proceeding has been commenced.

33ZB Effect of judgment

A judgment given in a representative proceeding:

(a)    must describe or otherwise identify the group members who

will be affected by it; and

(b)    binds all such persons other than any person who has opted

out of the proceeding under section 33J.

33ZF General power of Court to make orders

(1)    In any proceeding (including an appeal) conducted under this Part, the Court may, of its own motion or on application by a party or a group member, make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding.

(2)    Subsection (1) does not limit the operation of section 22.

I refer also to:

33J Right of group member to opt out

(1)    The Court must fix a date before which a group member may opt out of a representative proceeding.

(2)    A group member may opt out of the representative proceeding by written notice given under the Rules of Court before the date so fixed.

(3)     The Court, on the application of a group member, the representative party or the respondent in the proceeding, may fix another date so as to extend the period during which a group member may opt out of the representative proceeding.

(4)     Except with the leave of the Court, the hearing of a representative proceeding must not commence earlier than the date before which a group member may opt out of the proceeding.

33ZE Suspension of limitation periods

(1)    Upon the commencement of a representative proceeding, the running of any limitation period that applies to the claim of a group member to which the proceeding relates is suspended.

(2)     The limitation period does not begin to run again unless either the member opts out of the proceeding under section 33J or the proceeding, and any appeals arising from the proceeding, are determined without finally disposing of the group member’s claim.

Section 22 of the Federal Court of Australia Act provides:

22 Determination of matter completely and finally

The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided.

Webjet also relied on s 37M of the Federal Court of Australia Act which provides as follows:

37M The overarching purpose of civil practice and procedure provisions

(1)    The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:

(a)    according to law; and

(b)    as quickly, inexpensively and efficiently as possible.

(2)    Without limiting the generality of subsection (1), the overarching purpose includes the following objectives:

(a)    the just determination of all proceedings before the Court;

(b)    the efficient use of the judicial and administrative resources available for the purposes of the Court;

(c)    the efficient disposal of the Court’s overall caseload;

(d)    the disposal of all proceedings in a timely manner;

(e)    the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

(3)    The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.

(4)    The civil practice and procedure provisions are the following, so far as they apply in relation to civil proceedings:

(a)    the Rules of Court made under this Act;

(b)    any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Court.

31        Webjet referred in its submissions to three unreported decisions of this Court. It was contended that although there is no specific power in Part IVA, it was established that s 33ZF empowers the Court to make such order reinstating a group member after it has exercised the right to opt out under s 33J.

32        In King v AG Australia Holdings Ltd (formerly GIO Australia Holdings Ltd) [2002] FCA 364 Moore J made orders which included:

7. Opt out notices

7.1. The persons named in the schedule hereto be reinstated as group members (within the meaning of s33A of the Federal Court of Australia Act 1976 (Cth)) in this proceeding."

Set out in the schedule were the names of twelve people who had written to the Court seeking to withdraw their opt out notice.

This order was made against the background that a letter was sent (on or before 11 May 2001) to all group members in the proceeding (approximately 60,000 people) advising them that if they wanted to opt out of the proceeding they must do so on or before 15 June 2001. They were sent an opt-out notice to complete, if they wished. Approximately 20,000 opt-out notices were subsequently received by the Registry of this Court. Twelve people who had lodged an opt-out notice later wrote to the Court seeking to withdraw that notice and remain in the proceeding as group members. Those letters were received between 8 May 2001 and 11 July 2001. Order 7.1 above related to those twelve people.

33        On 13 December 2001, the applicant's solicitors filed a notice of motion seeking the reinstatement as group members of, ultimately, seventeen of their clients who had opted out of the proceeding apparently in error or by mistake. None of the twelve people, referred to earlier, who had written to the Court was included in the list of those named in the motion. In respect of those seventeen persons Moore J made an order on 25 February 2002 in substantially the same terms as the order set out above. The position of the twelve people to whom O7.1 related, was raised by Moore J of his own motion.

34        The several factors for making the order were the number of people involved was very small; there was no material prejudice to the first respondent; and each person endeavoured to withdraw their opt-out notice shortly after it was lodged, whether it was lodged by mistake or not.

35        While no issue was raised about the Court’s power to make the order, Moore J said that plainly, in his opinion, the power arose under s 33ZF(1) of the Federal Court of Australia Act which enabled orders to be made which the Court thought appropriate or necessary to ensure that justice was done in the proceeding.

36        In Darcy v Medtel Pty Ltd [2002] FCA 925, there were 255 group members. Of those, 63 had opted out. All but four of those who had opted out did so before 30 November 2001. An order pursuant to s 33J(1) fixed 30 November 2001 as the date by which group members could opt out of the proceedings: Darcy v Medtel Pty Ltd [2001] FCA 1369. The difficulty was that some of the notices sent to group members pursuant to the orders made on 26 September 2001 had the second page of the notice missing. There was no way of telling how many group members received the defective notices. The second page contained important information that might have borne on a group member's decision either to opt out or not opt out of the proceedings.

37        The parties were in agreement that steps had to be taken to remedy possible injustice that may have occurred by reason of the error in printing and sending the notices to group members. They were also in agreement that s 33ZF(1) provided the source of power for this to be done.

38        Justice Sackville made it clear that the reason for giving any group member who had opted out an opportunity to withdraw his or her opt-out notice was to overcome any injustice arising from the possibility that the group member acted on incomplete information in making his or her decision. Had an application been made simply on the ground that group members who had opted out should be permitted to change their mind, the result may well have been different: at [11] citing King v AG Australia Holdings Ltd (formerly GIO Australia Holdings Ltd) [2002] FCA 364 at [6], per Moore J.

39        In Vernon v Village Life Ltd [2009] FCA 516 Jacobson J acted under s 33ZF to dispense with the opt-out requirements of s 33J and 33X(1)(a). His Honour said there were a number of reasons why he ought to exercise the discretion to dispense with compliance with those opt-out requirements. Essentially, group members had been notified on at least two occasions of their right to opt out, and they had been invited on both of those occasions to indicate whether, if given the opportunity to do so, they would wish to exercise their entitlement to opt out. No group member has indicated any wish to do so.

40        Turning to reported cases, in McMullin v ICI Australia Operations Pty Ltd (1998) 84 FCR 1, Wilcox J considered the existence of power to “close the class”. Having considered s 33Z(1)(g) of the Federal Court of Australia Act and decided that the application was not covered by it, Wilcox J said, at 3-5:

However, this does not mean such an order is beyond power. Section 33ZF confers a wide and general power on the Court.

. . .

Section 33ZF appears in Div 6 of Pt IVA which is headed "Miscellaneous". It bears the marginal note "General power of Court to make orders". These two features support the conclusion, that would in any event arise from its wording, that s 33ZF(1) was intended to confer on the Court the widest possible power to do whatever is appropriate or necessary in the interests of justice being achieved in a representative proceeding. It is understandable Parliament should have thought it appropriate to make such a provision. In enacting Pt IVA of the Federal Court of Australia Act, Parliament was introducing into Australian law an entirely novel procedure. It was impossible to foresee all the issues that might arise in the operation of the Part. In order to avoid the necessity for frequent resort to Parliament for amendments to the legislation, it was obviously desirable to empower the Court to make the orders necessary to resolve unforeseen difficulties; the only limitation being that the Court must think the order appropriate or necessary to ensure "that justice is done in the proceeding".

I think an order fixing a date by which claimants must identify themselves is capable of falling within s 33ZF(1). The criterion "justice is done", involves consideration of the position of all parties. An order preventing unfairness to a particular party may be necessary to ensure justice is done in the proceeding.

41        More generally, in Courtney v Medtel Pty Ltd (2002) 122 FCR 168 the issue considered was communication by the respondent with group members about settling their claims. The applicant sought orders restraining the respondent from communicating with group members and requiring that any offer of settlement be notified to the applicant with a protocol apparently intended to facilitate an agreement about a settlement. In the course of discussing whether the Court had power to restrict communication between a respondent and group members, at [47]-[52] per Sackville J. His Honour said:

Section 33ZF

[48]    There are good reasons to give s 33ZF a generous interpretation. The section is couched in broad terms. Moreover, the Court is given power to act on its own motion. The language, which is described in the Explanatory Memorandum as "wide'', doubtless reflects the drafter's perception that the new statutory procedure for representative proceedings was likely to throw up novel problems that would require close supervision by the Court.

[49]    In construing s 33ZF, it is also appropriate to recognise the unusual position of group members in a representative proceeding brought pursuant to Pt IVA. Group members may benefit from the representative proceeding but their rights also might be adversely affected, since they are bound by any judgment in the proceeding unless they have opted out: s 33ZB(b). Consent is not required for a person to become a group member: s 33E(1). A group member must be given notice of his or her right to opt out of the proceeding (s 33X(1)(a)), but the group member will not necessarily receive personal notice of that right: s 33Y(5); Femcare v Bright (2000) 100 FCR 331 at 348-349.

    …

[52]     While s 33ZF(1) of the Federal Court Act should be given a broad construction, that does not mean it can or should become a vehicle for rewriting the legislation.

See also, generally, TMAC Pty Ltd trading as Northstar Property Services v Thomas Ford Trading Pty Ltd trading as Fresh Telecoms [2010] FCA 445.

Consideration

42        Singapore Airlines submitted that the issue was not whether the Court could readmit a group member, but whether, in the exercise of its discretion, it ought to do so. I shall assume that the Court has power, on the application of a person who has opted out of a representative proceeding, to reinstate that person as a group member, whether under s 33ZF or under s 22 of the Federal Court of Australia Act.

43        In my opinion the factors relevant to the exercise of that discretion to reinstate include:

(i)        the reasons for opting out;

(ii)        the period of time between the opt-out notice and the application to reinstate and what steps, if any, have been taken in the proceedings between the time of the opt-out notice and the application to reinstate;

(iii)        the grounds for seeking reinstatement;

(iv)        any prejudice to the applicant, the existing group members and the respondent or respondents; and

(v)        the effect on the applicant for reinstatement of permitting or refusing reinstatement, including any proposed terms.

These matters should be considered in the context of the terms and purpose of Part IVA.

44        Webjet submitted first that in King (above) Moore J permitted the opt-out notices to be withdrawn whether the notices were lodged by mistake or not.

45        Second, Webjet submitted that the view that group members should not be entitled to change their minds was a strict view not countenanced by the objects of an opt-out notice. At least one of the objects of representative proceedings generally and the opt-out procedure in particular was efficiency. It was submitted that it was not particularly efficient, in the events that had occurred in this proceeding, for Webjet to be forced into bringing a new proceeding against the respondent upon a strict view that decisions to opt out for commercial reasons must be irrevocable. This view failed to give credence to the reality that in the course of litigation the prospects of success against a defendant generally varied from time to time. In this particular case, after Webjet took its decision to opt out, the forensic landscape altered dramatically with determinations of a pivotal common issue which, in turn, facilitated negotiations ultimately leading to a settlement. It was said that it was not clear why group members who had done nothing and had remained in the group and were now to enjoy the fruits of the settlement should be placed in a more advantageous position than Webjet which took a deliberate commercial decision (from a position of some actual or perceived vulnerability) at a time when the forensic landscape was vastly different. Webjet accepted that it had moved belatedly, and its reasons for opting out four years ago were, essentially, the product of its free choice. On the other hand, it submitted, there should be no reason why that decision should be irrevocable.

46        Third, although Webjet now sought to be reinstated to get the benefit of a settlement negotiated by and on behalf of others, that motivation should not be held against it. It would be no less opportunistic for Webjet to take the benefit of precedents to commence a separate proceeding in another forum involving relevantly the same issues than it was to be reinstated, even at this late stage, to the representative proceeding.

47        This meant, submitted Webjet, that the real question was whether it would be a more efficient use of the parties’ resources for Webjet to be reinstated or to force it to commence a separate proceeding in the District Court. This called for the adoption of a practical approach. The case management objects in s 37M would suggest that it would be prima facie in the interests of Webjet and the respondents to avoid the need for the institution of a separate proceeding. Further Webjet submitted that Singapore Airlines was not materially prejudiced.

48        In my opinion, it is important to identify what is sought by this interlocutory application. Webjet applies for orders which would have the substantive effect of putting it in the same position as those entities in respect of which, on 29 March 2012, the Court approved the settlement of the proceeding on the terms set out in the Deed of Settlement, a copy of which is exhibited to the affidavit of Steven Lewis sworn 28 March 2012. Those entities were the applicant, all other group members who had not opted out under s 33J and Singapore Airlines (as defined in paragraph 2 of the Amended Application filed on 22 August 2011). No terms were suggested by Webjet.

49        Under that deed of settlement there was no admission of liability by Singapore Airlines but, as I have said, the settlement meant Singapore Airlines would pay 100 cents in the dollar of the group members’ claim, subject to a set-off defence. In relation to the set-off defence, clause 3.1 provided that within 28 days of Singapore Airlines receiving the Eligible Group Member’s Registration of Intention to Claim Form the Singapore Airlines’ legal representatives will notify the representatives of the Eligible Group Member of Singapore Airlines’ intention to assert that an Eligible Group Member's claim for commission on fuel surcharges is subject to a set-off defence. In that event the deed specifies consequential steps.

50        In the absence of evidence from Singapore Airlines as to its prejudice in fact, it was submitted on behalf of Singapore Airlines that when it settled the case, it was based on knowledge of who had opted out. So although Singapore Airlines had agreed to pay 100 cents in the dollar, including interest and costs, that decision was made on the basis of knowledge of who was not in the proceedings. This, it should be inferred, involved economic considerations which are taken into account by parties, so it should not be assumed that there was no merit to the defences that were put forward by Singapore Airlines. In deciding to enter into the settlement, Singapore Airlines negotiated a settlement in which it determined that it would give up all of its defences, except for the set-off defences. The defences raised matters such as estoppel, the Trade Practices Act, variation, election, and waiver, which had been given up for the purposes of the settlement. If proceedings were commenced by Webjet in the District Court, those defences would be available to Singapore Airlines, whereas they would not be available if Webjet were allowed to be reinstated into the representative proceedings. However, Singapore Airlines had not assessed whether it would rely on any of those defences in relation to Webjet in another court as, it was submitted, it did not yet know whether Webjet was going to be a part of the present proceeding or not. The prejudice was that those defences would be open to Singapore Airlines, if separate proceedings were commenced but those defences would not be open in this proceeding in relation to Webjet if it were reinstated. It was the opportunity to be able to rely on those defences that would be lost.

51        Webjet submitted that, in light of the settlement, I should infer that Singapore Airlines had no faith in its defences. Even if it were possible to do so in the absence of evidence, I do not regard it as appropriate for the Court, on an application such as the present, to attempt to evaluate the strength or otherwise of the cases as pleaded. There has been no admission of liability on the part of Singapore Airlines.

52        In terms of other material prejudice, Singapore Airlines submitted that the size of the settlement that it had been working towards would change substantially. The evidence now was that Webjet claimed to have an amount of at least $100,000 owing to it. When the settlement was negotiated, Singapore Airlines knew that Webjet was not a part of these proceedings, because it had opted out, and, as a result, it did not have to factor that particular payment into the settlement.

53        As to fairness, Singapore Airlines submitted Webjet had effectively been able to place itself in a protected position, in that it had been at no risk of being bound by an adverse court judgment or an adverse settlement. It only sought to participate now that there was a settlement on offer, and it was submitted that was not just unfair to Singapore Airlines, but that it was also unfair to the other group members, who had exposed themselves to risk, and would have been bound by the outcome of this case however it may have eventuated. It was submitted that there was no reason why Webjet could not have come forward much earlier than it did. The application was made once there was a settlement on foot.

54        As to efficiency, it was submitted that the comparison was not limited to a choice between the present proceeding and proceedings in the District Court but also to negotiation and forms of alternative dispute resolution.

55        As to specific prejudice by way of delay in the resolution of the present proceedings, the only delay would be because Webjet had such a substantial claim the set-off defences were more likely to be pressed or more likely to be closely considered by Singapore Airlines because those set-off defences, the same as the other defences, were subject to not just legal considerations but economic considerations. With smaller claims it may be that there was a set-off available to Singapore Airlines but because of the quantum at stake Singapore Airlines would choose not to press it. With the large claim that Webjet has, the economics of it suggested that pressing the set-off would be worthwhile. It was however accepted by Singapore Airlines that the procedure that was set out in relation to the settlement was that there were a number of ADR mechanisms aimed at resolving the question of set-off before coming back to the Court. Presently that aspect of the matter, for the present parties and group members, is listed for 2 May 2012.

56        In my view an important factor relevant to the exercise of the discretion is that the applicant does not contend that it or any of the group members in fact would be prejudiced. For example, the applicant does not submit that, from its perspective, the settlement or the process to effect the settlement would have been any different if Webjet was now permitted to participate. And this is not a case like King (above) where there was a finite pool available for distribution.

57        As to Singapore Airlines, it has adduced no evidence that it would be prejudiced but pointed to a number of matters which must, in those circumstances, go to issues of principle.

58        It was common ground that the effect of the orders sought will not be to affect time that has already run for the purposes of any limitation period.

59        Singapore Airlines identifies a number of matters which, it submitted, tell against an exercise of discretion in Webjet's favour.

60        Most of those matters go to the opportunism of Webjet’s present application. In my opinion Webjet cannot, and does not seek to, hide from that characterisation. Webjet says no more than, given its circumstances at the time it gave the opt-out notice, it thought it would be commercially disadvantaged if it had participated in the proceedings from their commencement but, now that it is better established commercially, it sees no such disadvantage. I also accept that it is unlikely that Webjet would have made its present application if the principal proceedings had had no or limited prospects of success.

61        As to timing, although Mr Noon states in his affidavit that Webjet “is now in a position where it has a larger presence in the market and no longer holds the same concerns that its supply and access to airline inventory would be under threat if it were to make a claim against the respondents for commission on fuel surcharges” he sets out figures for the financial year ending 30 June 2011 showing that the company had sales of $592 million (compared to $250 million for the financial year ending 30 June 2007) and net profit before tax of $15.4 million (compared to $5.3 million for the financial year ending 30 June 2007). Webjet has not established that its place in the market prevented it from making its application for reinstatement at an earlier time. It is at least implicit in Webjet’s submission that it would not have done so before the Full Court decision in Leonie’s Travel (above) in mid 2010.

62        Thus in relation to a substantial claim, presently quantified at approximately $110,000 but which could be larger, the Court is asked to permit Webjet to take advantage of the processes thus far undertaken on the part of the parties to arrive at the settlement. I would include in this, at the level of principle, the opportunity for compromise whether by way of ADR or otherwise.

63        In my opinion, at the level of principle, there is a value in certainty from the time of the opt-out procedure being concluded. Thus the willingness of a respondent to settle proceedings would or may be compromised if it did not know which of the entities that had opted out would wish to take the benefit of the settlement. I accept that the opt-out procedure is designed to achieve some certainty. I also accept that if the threshold for reinstatement is low then that runs counter to certainty in the period during which issues of liability and remedy are resolved.

64        I accept that if reinstatement can be achieved because of no more than changed commercial considerations then the group membership would be subject to greater change and this may be deleterious to resolution of the proceedings.

65        But more important, in my opinion, is the consideration of relative risk. The effect of the opt-out notice is that Webjet was not bound by the present proceedings and would have been entitled to start other proceedings against, relevantly, Singapore Airlines. If a party which had opted out for commercial reasons was permitted to be reinstated where those reasons had changed and it was now not commercially disadvantageous but, in light of the settlement, commercially advantageous to participate, that entity would have in effect a choice which, in my opinion, is inimical to the scheme of Part IVA. The party seeking to be reinstated chose not to be, and would not have been, at risk of the representative proceedings failing in whole or in part, whether by judgment or compromise, but now seeks the favourable exercise of the Court’s discretion to allow it to take the benefit of what that party regards as a favourable settlement.

66        I note the evidence on behalf of Webjet that if its present application fails, it intends to commence proceedings against Singapore Airlines in the District Court of New South Wales on the same causes of action as are involved in the principal proceedings in this Court. No bar to that course, whether by reference to a limitation period or otherwise, has been identified before me. Thus, refusing Webjet’s application does not have the consequence that it is without remedy. I take into account that that course would necessarily involve additional time and expense, including legal costs.

67        In light of these competing considerations I am not persuaded that the discretion should be exercised in favour of Webjet. In summary, the reason for and timing of Webjet’s application to be reinstated as a group member do not persuade me that I should exercise my discretion in the applicant’s favour in light of the provisions and purpose of Part IVA.

68        I therefore order that Webjet’s interlocutory application be dismissed.

69        In relation to costs, Webjet must pay Singapore Airlines’ costs of Webjet’s interlocutory application. There should be no order in respect of the applicant’s costs since it adopted a neutral position on the interlocutory application.

Associate:

Dated:    24 April 2012