Sister Marie Brigid Arthur (Litigation Representative) v Northern Territory of Australia [2019] FCA 859
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. Pursuant to s 33X(2) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act), the Applicant be relieved from the requirement to give notice to group members of the commencement of the proceeding and of their right to opt out of the proceeding before the date fixed under s 33X(1)(a).
2. Pursuant to s 33X(4) of the FCA Act, the Applicant is relieved from the requirement to give notice to group members of the application for approval of the settlement.
3. The parties are to confer with a view to submitting, by 4pm on 6 June 2019, agreed minutes of order with respect to a timetable for the steps required for consideration of the application for approval of the settlement. In the event that there is no agreement, the Applicant is to exercise the liberty to apply in which case the Court will list the matter for a case management hearing.
4. These proceedings are adjourned to a date to be fixed.
5. There be no order with respect to the costs of today’s hearing.
6. There be liberty to the parties to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
EX TEMPORE REASONS FOR JUDGMENT
WHITE J:
1 These proceedings are brought by Sister Marie Brigid Arthur as the Litigation Representative for two youths. In order that the identity of the two youths not be disclosed they have been given the designations “ECR18” and “ECU18” respectively. ECR18 and ECU18 bring the proceedings as representative parties under Pt IVA of the Federal Court of Australia Act 1976 Act (Cth) (the FCA Act) on behalf of all persons who were detained at the Alice Springs Youth Detention Centre (ASYDC) and the Don Dale Youth Detention Centre (DDYDC) (collectively the Detention Centres) between the commencement of proceedings on 9 August 2018 and 24 October 2018.
2 The proceedings are an unusual Pt IVA application as they do not include any claim for damages or other monetary relief. Instead, the applicant seeks relief by way of declarations and injunctions in respect of alleged breaches by the Northern Territory of Australia and/or those in charge of the Detention Centres of duties owed by them under the Youth Justice Act 2005 (NT) (YJ Act), the Youth Justice Regulations 2005 (NT) (the Regulations), Policy Determinations made under the Regulations and, in addition, in respect of alleged breaches of the Racial Discrimination Act 1975 (Cth).
3 In addition to the claim pursuant to Pt IVA, ECR18 and ECU18 bring the proceeding in a representative capacity under Div 9.2 of the Federal Court Rules 2011 (Cth) (the FCR) on behalf of all persons who were not detained at the Detention Centres between 9 August and 24 October 2018 but who had been charged with an offence on or before 24 October 2018 which could result in them being detained in the Detention Centres on sentence or on remand after 24 October 2018.
4 The proceedings were listed for hearing in the week commencing 20 May 2019. However, the parties negotiated a settlement of the proceedings, and that hearing was vacated.
5 On 23 April 2019, the applicant filed an interlocutory application seeking, pursuant to s 33V of the FCA Act and r 9.70 of the FCR, approval of the settlement. In the same interlocutory application, the applicant sought a number of orders which are ancillary to, or preparatory for, the hearing of the application for approval. Relevantly, for today’s purposes, they are:
(a) an order pursuant to s 33J of the FCA Act fixing the date by which group members must opt out of the proceeding;
(b) orders under s 33X(2) of the FCA Act dispensing with the requirement of the applicant to give notice to group members of:
(i) the commencement of the proceeding; and
(ii) the right of group members to opt out of the proceeding; and
(c) an order pursuant to s 33X(4) of the FCA Act dispensing with the requirement for the applicant to give notice to group members of the application for the settlement approval.
6 The Court heard some submissions on 20 November 2018 in relation to the fixing of the opt out date and in support of the applications under s 33X(2). It sought further information with respect to the latter and had not concluded the determination of those matters when the settlement was reached.
7 All parties join in seeking the fixing of an opt-out date. It is not necessary for the Court therefore to consider the different approaches to the question of whether dispensation with the opt out process itself is possible: cf Vernon v Village Life Ltd [2009] FCA 516 at [69]; TW McConnell Pty Ltd as trustee for McConnell Superannuation Fund v SurfStitch Group Ltd [2018] NSWSC 1749 at [29]-[30].
8 Accordingly, the only issue before the Court presently is whether the applicant should be relieved from the obligation to give the notices required by s 33X of the FCA Act, namely, notice of the commencement of the proceedings and notice of the right of group members to opt out of the proceedings (s 33X(1)(a)), and notice of the application for approval of the settlement (s 33X(4)).
9 The Court’s power to dispense with the notice requirements imposed by s 33X(1), when the proceedings do not include a claim for damages, derives from s 33X(2), which provides:
(2) The Court may dispense with compliance with any or all of the requirements of subsection (1) where the relief sought in a proceeding does not include any claim for damages.
10 Section 33X(4) establishes a presumptive position that the Court will not approve a settlement of a Pt IVA action unless notice of the application for approval has been given to group members. However, the subsection also permits the Court to determine an application for approval of a settlement without group members having had notice of the application for approval if the Court is satisfied that it is just to do so.
11 The discretion vested in the Court by s 33X(2) to dispense with the s 33X(1) notice requirements when the proceedings do not include a claim for damages is, in terms, unfettered. Nevertheless, as with all judicial discretions, it must be exercised judicially with regard to the purpose for which it is conferred and with regard to the content of Pt IVA as a whole: Femcare Ltd v Bright [2000] FCA 512; (2000) 100 FCR 331 at [67]. This means that the Court should take account of the consequences for group members of being bound by an adverse determination of which they have not had notice. In Femcare, the Full Court continued:
[68] … Doubtless, in some cases an adverse determination will be of little practical consequence to an individual group member. In others, for example, where declaratory relief is sought as to the interpretation of an important contractual provision, the consequences might be significant. In the latter case, the Court is very likely not to be favourably disposed towards an application to dispense with the notice requirement. Section 33X(2) is not a charter for the infliction of injustice.
12 It is pertinent that the dispensing discretion is available when the proceedings do not include a claim for damages. That may be taken to reflect a legislative understanding that the interests of group members are less likely to be affected adversely by the resolution of proceedings of that kind.
13 An important consideration bearing on the exercise of the discretion is the Court’s supervisory function under Pt IVA in protecting the interests of class members: Money Max Int Pty Ltd v QBE Insurance Group Ltd [2016] FCAFC 148; (2016) 245 FCR 191 at [171].
14 Matters bearing on the formation of the state of satisfaction required by s 33X(4) were considered in Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (in liq) (No 2) [2016] FCA 1310 and Matthews v SPI Electricity Pty Ltd (No 16) [2013] VSC 74. Those authorities indicate that the following matters may be pertinent:
(a) whether there is a reasonable argument which may be advanced by a group member in opposition to the settlement;
(b) whether the settlement is to the advantage of group members as a whole;
(c) whether the settlement prejudices any group member or class of group member;
(d) whether provision of notice will create a risk of confusion or uncertainty on behalf of group members;
(e) the potential for delay; and
(f) the time and expense of giving notice.
15 Again, the Court’s protective function is an important matter.
16 In addition, it is pertinent in my view to have regard to the fact that ECR18 and ECU18 also bring the present proceedings in a representative capacity under Div 9.2 of the FCR on behalf of those youths who were not detained in the Detention Centres between the commencement of proceedings on 9 August 2018 and 24 October 2018 but who were charged with an offence on or prior to 24 October 2018 which could result in them being detained at the Detention Centres on sentence or remand after 24 October 2018. The proposed settlement will mean that the representative action in respect of that class of persons will not be pursued, so that they will be affected by it.
17 In relation to the exercise of the discretion under s 33X(2), the applicant relied upon the following matters:
(a) the fact that the proceeding does not include any claim for damages and, even if successful, will not result in any payment to group members;
(b) the relief sought which is specific to group members is only the declarations that the respondents had breached statutory and regulatory duties;
(c) there are no adverse costs consequences for group members as the proposed settlement involves the dismissal of the proceedings with no order as to costs; and
(d) no group member has to date paid any of the costs incurred in relation to the proceeding as they have been brought under grants of legal aid from the Northern Territory Legal Aid Commission (NTLAC).
18 The fact that the proposed settlement does not involve any monetary payment is an important consideration, not only because it is the circumstance which enlivens the discretion to dispense, but because it also means that many of the matters which would ordinarily make it appropriate for group members to have notice of the proceedings and, in particular, notice of the application for approval of the settlement, do not exist in this case.
19 The terms of the proposed settlement, which have been disclosed to the Court, indicate that they are not such as will give rise to issues between one or more group members, or between categories of group members. Nor is it apparent that the terms are such that it can reasonably be supposed that group members would wish to be heard about them. That is to say, it is not immediately apparent that there would be any reasonable argument which a group member may wish to seek to advance in the proceedings, and, in particular, in opposition to the approval of the settlement.
20 The applicant also points to, and relies upon, the practical difficulty which she will experience in giving notices in an effective way to group members. The evidence indicates that there are 88 group members. These group members have been identified by the solicitor for the Northern Territory who acts for the respondents. Accordingly, there should be no practical difficulty apparent in those names being provided to the applicant.
21 The difficulty, however, to which the applicant points, is in the giving of notices. Seventeen of the group members are currently in the care of the Chief Executive Officer (the CEO) of Territory Families, pursuant to s 67 of the Care and Protection of Children Act 2007 (NT). Prima facie therefore, the CEO is the person to whom the notices should be given. The CEO is not a party to the proceedings as a respondent but the Minister for Territory Families is the fourth respondent. That fact by itself suggests that it would not be appropriate for the CEO himself or herself to be making a decision with respect to the proceeding on behalf of these 17 youths. That may not be a decisive consideration because the Court could assume that the CEO would make arrangements for independent advice to be given in respect of each of the 17 youths before making any decision. But it does point up a practical issue about the efficacy of the giving of notices.
22 The applicant’s solicitor in the NTLAC has deposed to having limited contact details for most of the group members. She does have contact details for 28 of the 88 group members but considers that at least five of those contact details are no longer current. Other information indicates that 13 of the 88 group members are currently detained at the DDYDC and nine detained at the ASYDC.
23 NTLAC acts for only 28 of the group members in the present proceedings. Eleven of those 28 are currently detained either in the DDYDC or the ASYDC. Of the remaining 17, three have an address at Bail Support Accommodation in Darwin or in Alice Springs, three have known street addresses, the last known address for four is either the DDYDC or ASYDC or the Darwin Correctional Centre but the youths are not currently detained at those places, and seven have addresses in an Aboriginal community, an Aboriginal town camp or in a remote outstation.
24 On the basis of this information the applicant submits that she will experience considerable difficulty in practice in ensuring notices are given to many of the group members.
25 It is also reasonable for the Court to proceed on the basis that alternative methods of giving notice, such as the provision of advertisements and the like, are not likely to be practicable or effective.
26 Counsel also emphasised that the group members comprise minors and that there are likely to be difficulties in respect of many in locating a responsible adult who may make an informed decision concerning opting out or objecting to the settlement. The disparate, and in some cases remote locations of group members, also means that the provision of notices is likely to be complicated and time consuming. Further, the very content of the notices is likely to be productive of some confusion and consternation for some group members.
27 The applicant relied on essentially the same matters in submitting that the Court can be satisfied that it is just to relieve her from giving notice of the application for the settlement.
28 As I indicated at the commencement of these reasons, the respondents support the Court making the dispensation orders sought by the applicant.
29 It would be a matter of concern in relation to the making of the dispensation orders sought if it appeared that a group member may be bound by a form of issue estoppel in respect of a breach of statutory or regulatory duty in the event that he or she was to bring an individual action.
30 Counsel for the applicant submitted that the Court need not be concerned on that account having regard to a practical consideration, namely, the limitation period of six months for the bringing of such an action fixed by s 215B of the YJ Act. That six month period has now expired in respect of the latest period of detention for those within the group, namely, the date of 24 October 2018, and any youth who did wish to bring such an action should have commenced it by now. No such actions are known.
31 Counsel for the respondents submitted that, in any event there would be difficulties in an issue estoppel defence being raised in any proceedings commenced by an individual group member, given that the proposed settlement would involve a dismissal by consent of the proceedings. In that circumstance, there would be difficulty in identifying precisely an issue which is foreclosed by reason of the order.
32 I accept each of those submissions.
33 Having regard to all these matters, in particular the unusual nature of the proceedings, the fact that there are unlikely to be issues inter se between group members, the considerable practical difficulties which would be experienced by the applicant in giving the notices required by s 33X, and the absence of any apparent prejudice to group members, I am satisfied that it is appropriate to make the dispensation orders.
34 Accordingly, I make the following orders:
(1) Pursuant to s 33X(2) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act), the Applicant be relieved from the requirement to give notice to group members of the commencement of the proceeding and of their right to opt out of the proceeding before the date fixed under s 33X(1)(a).
(2) Pursuant to s 33X(4) of the FCA Act, the Applicant is relieved from the requirement to give notice to group members of the application for approval of the settlement.
(3) The parties are to confer with a view to submitting, by 4pm on 6 June 2019, agreed minutes of order with respect to a timetable for the steps required for consideration of the application for approval of the settlement. In the event that there is no agreement, the Applicant is to exercise the liberty to apply in which case the Court will list the matter for a case management hearing.
(4) These proceedings are adjourned to a date to be fixed.
(5) There be no order with respect to the costs of today’s hearing.
(6) There be liberty to the parties to apply.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White. |
Associate:
NTD 34 of 2018 | |
ECR18 | |
Second Represented Person | ECU18 |
Respondents | |
Fourth Respondent: | MINISTER FOR TERRITORY FAMILIES |
