FEDERAL COURT OF AUSTRALIA

Zonia Holdings Pty Ltd v Commonwealth Bank of Australia Limited (No 2) [2019] FCA 1061

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to r 1.32 of the Federal Court Rules 2011 (Rules) and s 33ZF of the Federal Court of Australia Act 1976 (Cth) (the Act), and until further order:

(a)    the applicant in this proceeding (Zonia Applicant), and the applicants in proceeding NSD1158/2018 (Baron Applicants) (together, the Applicants) jointly:

(i)    nominate one email address for service;

(ii)    engage one set of counsel to represent the Applicants and group members in both proceedings;

(iii)    use their best endeavours to ensure that all correspondence and other communication from the Applicants’ solicitors to the respondent’s solicitors shall be sent or made jointly on behalf of the Applicants by only Maurice Blackburn Pty Ltd or Phi Finney McDonald Pty Ltd (save for correspondence and communications relating solely to making or responding to any interlocutory applications in respect of matters that are not common to this proceeding and proceeding NSD1158/2018);

(iv)    make any interlocutory applications that are necessary or respond to any interlocutory applications filed by the respondent, save for matters that are not common to this proceeding and proceeding NSD1158/2018;

(v)    retain expert witnesses and file any expert witness evidence;

(vi)    file any lay evidence (other than evidence from the Baron Applicants or an officeholder of the Zonia Applicant);

(vii)    conduct the discovery process including negotiating an electronic discovery protocol and any categories of discovery;

(viii)    use their best endeavours to avoid duplication of work and progress the two proceedings in a cooperative manner;

(ix)    confer on any major decisions (including pleadings amendments), the making or amendment of any interlocutory applications filed by the Applicants whether jointly or separately, and listing dates;

and each comply with the Cooperative Litigation Protocol dated, and provided to the Court on, 18 March 2019;

(b)    the respondent be required to produce one set of discovery documents to the Applicants;

(c)    evidence in this proceeding be evidence in proceeding NSD1158/2018; and

(d)    liability for payment of third-party disbursement costs incurred by the Applicants’ legal representatives on behalf of the Applicants and arising from the Applicants’ joint performance of work in accordance with order 1(a) be split equally between the Zonia Applicant and the Baron Applicants.

2.    The Zonia Applicant be granted leave to file and serve:

(a)    an Amended Originating Application substantially in the form of Annexure AJW-9 to the affidavit sworn by Andrew John Watson dated 20 February 2019 (Harmonised Originating Application); and

(b)    a Second Further Amended Statement of Claim substantially in the form of Annexure AJW-10 to the affidavit sworn by Andrew John Watson dated 20 February 2019 (Harmonised Statement of Claim),

with each document to be harmonised with, and in respect of the allegations made against the respondent substantially the same as, the corresponding documents to be filed and served by the Baron Applicants in accordance with the corresponding orders in proceeding NSD1158/2018.

3.    Pursuant to s 33K(1) of the Act, the Zonia Applicant be granted leave to amend the group definitions in this proceeding accordingly.

4.    Pursuant to r 1.34 of the Rules:

(a)    the requirements of r 8.23(2)(a) of the Rules be dispensed with for the purpose of the Harmonised Originating Application to be filed by the Zonia Applicant; and

(b)    the requirements of r 16.59(2)(a) of the Rules be dispensed with for the purpose of the Harmonised Statement of Claim to be filed by the Zonia Applicant.

5.    By no later than 28 days after service of the Harmonised Statement of Claim, the respondent file and serve its defence to the Harmonised Statement of Claim.

6.    The respondent pay the Zonia Applicant’s costs of and incidental to this interlocutory application, save for the costs thrown away by reason of the amendments the subject of Orders 2-4 above, which shall be paid by the Applicants.

7.    The parties provide to the Associate to Yates J by 4.00 pm on 23 July 2019, agreed or competing draft programming orders in respect of the respondent’s interlocutory application filed in this proceeding on 21 February 2019, and the respondent’s interlocutory application filed in proceeding NSD1158/2018 on 21 February 2019, in respect of the relief that the respondent now wishes to pursue.

8.    This proceeding, and proceeding NSD1158/2018, be listed for a case management hearing at 9.30 am on 26 July 2019.

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

REASONS FOR JUDGMENT

YATES J:

Introduction

1    The applicant, Zonia Holdings Pty Ltd (Zonia), and the applicants in proceeding NSD 1158/2018 Philip Anthony Baron and Joanne Baron (the Baron applicants), seek orders for (what has been described in submissions as) Cooperative Case Management (the Cooperative Case Management orders). These orders are opposed by the respondent in each proceeding, Commonwealth Bank of Australia (CBA).

2    For the reasons which follow, I am persuaded that it is appropriate that such orders be made in each proceeding: see Baron v Commonwealth Bank of Australia Limited (No 2) [2019] FCA 1062.

Background

The Zonia proceeding

3    This proceeding (the Zonia proceeding or the proceeding) was commenced on 9 October 2017 under Part IVA of the Federal Court of Australia Act 1976 (Cth) (the Act) by Zonia on its own behalf and, save for certain exceptions, on behalf of all persons who acquired an interest in CBA shares during the period 1 July 2015 and 1.00 pm on 3 August 2017 and suffered loss or damage by reason of the conduct pleaded in the statement of claim. It is an “open” class action. It is funded by IMF Bentham Ltd (IMF). Zonia has foreshadowed that a common fund order will be sought.

4    The allegations pleaded in the statement of claim (the Zonia statement of claim) stem from CBA’s alleged failure to comply with certain of its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) and the Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (Cth), as well as its own anti-money laundering and counter-terrorism financing program.

5    Zonia alleges that CBA was aware of certain information relating to its non-compliance with these obligations, which it did not disclose to the market prior to 3 August 2017—the date when the Australian Transaction Reports and Analysis Centre (AUSTRAC) commenced civil penalty proceedings in this Court with respect to that non-compliance (the AUSTRAC proceeding). Zonia also alleges that CBA represented to the market that it had in place effective systems for ensuring compliance with relevant regulatory requirements; that its risk management systems had ensured appropriate monitoring and reporting of compliance activities; and that it had complied with its continuous disclosure obligations.

6    Zonia’s case is that, by failing to make the disclosures it should have made, CBA contravened ASX Listing Rule 3.1 and s 674(2) of the Corporations Act 2001 (Cth) (the Corporations Act), and engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 1041H(1) of the Corporations Act; s 12DA(1) of the Australian Securities and Investments Commission Act 2001 (Cth); and/or s 18 of Sch 2 to the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law).

The Baron proceeding

7    On 9 August 2017, the solicitors for the Baron applicants, Phi Finney McDonald (PFM), began investigating a securities class action against CBA arising out of the circumstances I have summarised above. On 10 August 2017, PFM published an article on its website stating that CBA may face a class action over its alleged failure to disclose. This was approximately two weeks before IMF announced that it was investigating the same circumstances, which led to the commencement of the Zonia proceeding on 9 October 2017.

8    In late August 2017, one of the principals of PFM, Mr Phi, was contacted by a number of “significant institutional investors” who enquired whether PFM was willing to investigate the prospects of a competing class action against CBA. In about October 2017, the institutional investors instructed PFM to procure litigation funding on competitive terms, subject to PFM forming a positive view on the prospects of success of such a class action.

9    After completing its due diligence, PFM commenced negotiations with Therium Australia Limited (Therium) for litigation funding. A book-building process commenced on or about 17 November 2017.

10    The Baron applicants commenced their proceeding (the Baron proceeding) on 29 June 2018. It is a “closed” class action, with group membership limited to those who had signed a funding agreement with Therium at the commencement of the proceeding. Otherwise, the Baron proceeding raises broadly the same allegations and pleads the same claims as made in the Zonia proceeding, save that the claim period defining members of the class is longer (16 June 2014 to 1.00 pm on 3 August 2017). According to Mr Finney, another PFM principal, the period of investigation before commencing proceedings allowed PFM to consider additional relevant information that became publicly available through the AUSTRAC proceeding and the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

11    As a result of the book-building process to which I have referred, the Baron proceeding commenced with 28,918 group members. The evidence before me indicates that the group members in the Baron proceeding include four named, and very large, United States pension funds—referred to in the local press as a “who’s who” of heavy-hitting US pension funds who are driving the action—and other (including Australian) institutional investors. I am satisfied that these sophisticated investors knew of the existing Zonia proceeding but, for their own reasons, did not wish to be group members in that proceeding, but wished to have their own chosen legal representation and their own negotiated funding. While it might be said (as both Zonia and the Baron applicants contended) that the group members in the Baron proceeding have made a de facto election to opt out of the Zonia proceeding, the present group definition in the Zonia proceeding would still cover those group members in the Baron proceeding who acquired an interest in CBA shares during the period 1 July 2015 and 1.00 pm on 3 August 2017 and suffered loss or damage by reason of the conduct pleaded in the Zonia statement of claim. I should not, however, leave out of consideration the fact that the Cooperative Case Management orders contemplate that Zonia will amend its definition of group members to excise the group members in the Baron proceeding. Thus, as a matter of substance and form, each proceeding would be brought on behalf of separate and non-overlapping group members, with a significant section of the group members in the Baron proceeding not wishing to be group members in the Zonia proceeding.

Case management of the two proceedings to date

12    On 31 July 2018, the Court made orders that, until further order, the Zonia proceeding and the Baron proceeding be case managed together. In each proceeding, it was ordered that Zonia and the Baron applicants confer and, at a case management hearing listed for 24 August 2018, report to the Court on any proposed joint approach to the conduct of both proceedings. The matters to be considered by Zonia and the Baron applicants were to include:

    the possibility of one counsel team for all applicants; and

    the possibility of an agreed protocol for the efficient conduct of the proceedings, including with respect to:

(i)    using reasonable endeavours to agree on the areas of expertise required for expert evidence, the identity of particular experts to be briefed and the contents of any briefs and letters of instructions to experts;

(ii)    consulting with each other before preparing, filing, and serving any evidence;

(iii)    using reasonable endeavours to progress this proceeding and proceeding NSD 1158 of 2018 in a similar manner;

(iv)    cooperating in the conduct of or response to any interlocutory application in this proceeding or NSD 1158 of 2018;

(v)    notifying the other in the event that an interlocutory application is deemed prudent or necessary within a reasonable time before such application is filed; and

(vi)    conferring about key dates.

13    In the period August to November 2018, subsequent orders were made in each proceeding extending the time within which Zonia and the Baron applicants were to report to the Court.

14    On 16 November 2018, Zonia and the Baron applicants respectively filed interlocutory applications to have the Zonia proceeding and the Baron proceeding consolidated on the basis that Zonia and the Baron applicants would be joint applicants in the consolidated proceeding and that leave would be granted for Zonia’s solicitors, Maurice Blackburn Pty Ltd (Maurice Blackburn), and PFM to jointly represent the applicants in the consolidated proceeding subject to certain conditions being fulfilled. Submissions and evidence in relation to these applications were filed and served on CBA. Zonia and the Baron applicants also provided a draft consolidated statement of claim which adopted each of the substantive claims raised in the Zonia proceeding and the Baron proceeding, with the longer claim period of the Baron proceeding.

15    While supporting the step of consolidation, CBA raised certain matters of concern, the most important of which for present purposes was the prospect of increased costs because of the duplication of work that was likely to be incurred with two firms of solicitors acting for the applicants in the proposed consolidated proceeding.

16    By consent, a case management hearing appointed for 19 December 2018 was adjourned to 6 February 2019 to permit Zonia and the Baron applicants to finalise a Deed of Cooperation between themselves.

17    On the evening of 4 February 2019, in advance of the case management hearing listed for 6 February 2019, Zonia and the Baron applicants informed CBA that they no longer sought consolidation of the two proceedings. Rather, they sought to have the two proceedings remain on foot, with “harmonised” pleadings in each proceeding. It was proposed that the Zonia proceeding would remain as an open class proceeding (carving out group members who met the group definition in the Baron proceeding) and that the Baron proceeding would remain as a separate, closed class proceeding.

18    At the case management hearing on 6 February 2019, leave was given to Zonia and the Baron applicants to amend their respective interlocutory applications (formerly for consolidation). Programming orders were also made in each proceeding for the filing of further evidence and submissions, with each amended interlocutory application listed for hearing on 11 March 2019.

The orders sought for Cooperative Case Management

19    By their respective amended interlocutory applications, Zonia and the Baron applicants (together, the Applicants) now seek the Cooperative Case Management orders—namely that, in their respective proceedings they will jointly:

    nominate one email address for service;

    engage one set of counsel to represent them and the group members in each proceeding;

    use their best endeavours to ensure that all correspondence and other communications from them are made jointly by either Maurice Blackburn or PFM (other than correspondence and communications relating solely to matters that are not in common in the two proceedings);

    make or respond to interlocutory applications (other than in respect of matters not in common in the two proceedings);

    retain expert witnesses and file any expert witness evidence;

    file any lay evidence (other than from the Baron applicants or an officeholder of Zonia);

    conduct discovery, including negotiating an electronic discovery protocol and any categories of documents for discovery;

    use their best endeavours to avoid duplication of work and progress the two proceedings in a cooperative manner; and

    confer on major decisions (including pleading amendments), the making or amendment of interlocutory applications, and listing dates.

20    They also seek orders that:

    CBA be required to produce only one set of discovered documents;

    evidence in one proceeding be evidence in the other;

    liability for the payment of third-party disbursements arising from the joint performance of work (as contemplated above) be split equally between Zonia and the Baron applicants; and

    leave be granted to file in the respective proceedings a harmonised originating application and a harmonised statement of claim.

21    In the course of the hearing on 11 March 2019, the Applicants also indicated that they proposed to prepare a Cooperative Litigation Protocol (Litigation Protocol) governing their joint activity under the proposed Cooperative Case Management orders. I made orders requiring the applicants to provide this protocol to CBA and the Court, with leave being granted to the parties to raise for further argument any matter arising from this document as it might impact on the decision whether or not to make the orders sought.

22    A copy of the Litigation Protocol was received by the Court on 18 March 2019. On 25 March 2019, CBA filed written submissions in which it said that it had “considerable concerns” with the protocol.

23    On 1 April 2019, Zonia and the Baron applicants filed joint submissions in response to CBA’s submissions filed on 25 March 2019. Zonia also filed an affidavit sworn by Mr Watson from Maurice Blackburn; the Baron applicants filed an affidavit sworn by Mr Sandhu from PFM.

24    On 2 April 2019, CBA’s solicitors, Herbert Smith Freehills, sent an email to my Associate noting that the joint responding submissions and the two affidavits had been filed without leave and stating that, if the Court were minded to accept this material, CBA was considering whether it wished to object to the affidavits, cross-examine the deponents and/or advance any material in response.

25    On 5 April 2019, Herbert Smith Freehills sent a further email to my Associate in which they advised that the parties had consented to an order being made which would permit CBA to file, by 4.30 pm that day, written submissions addressing the admissibility of the two affidavits. This order was made. CBA’s opposition to the Court receiving the Applicants’ joint responding submissions was withdrawn. In their email, Herbert Smith Freehills also noted that Zonia’s and the Baron applicants’ consent was given on condition that they reserved the right to respond by filing and serving further written submissions on 8 April 2019. Zonia and the Baron applicants filed their further submissions, as foreshadowed.

26    On 27 May 2019, the parties drew to my attention certain observations made by Ward CJ in Equity in Wigmans v AMP Limited [2019] NSWSC 603.

CBA’s position

CBA’s pending interlocutory applications

27    As I have noted, CBA opposes the making of the Cooperative Case Management orders. Further, on 22 February 2019 it filed an interlocutory application in the Baron proceeding seeking to permanently stay that proceeding. In its interlocutory application, CBA also sought an order limiting the costs for which it could be liable should the Baron proceeding continue. On the same day, CBA also filed an interlocutory application in the Zonia proceeding seeking a similar costs-limiting order should, once again, the Baron proceeding continue.

28    At the commencement of the hearing of the amended interlocutory applications for the Cooperative Case Management orders, CBA also sought to have determined its own interlocutory applications, which had only been listed for case management on that day. This was opposed by Zonia and the Baron applicants, largely because these interlocutory applications had not been foreshadowed and the hearing on 11 March 2019 had been appointed solely for the purpose of hearing and determining the amended interlocutory applications which had been the subject of specific programming orders.

29    Zonia argued that there was no reason why CBA’s interlocutory applications needed to be heard on 11 March 2019. There was nothing which precluded the Court from dealing with the amended applications for the Cooperative Case Management orders, leaving CBA’s interlocutory applications to be heard and dealt with, if need be, at a later time.

30    The Baron applicants in particular said that they would be prejudiced if CBA’s interlocutory applications were to be heard on 11 March 2019 because they would wish to lead evidence on why the Baron proceeding should not be stayed. Further, they argued that, if a permanent stay of their proceeding was to be pursued, they would in all likelihood file their own interlocutory application seeking a stay of the Zonia proceeding. I can anticipate that, if that were to happen, Zonia would file its own interlocutory application seeking to stay the Baron proceeding.

31    In light of this opposition, the prospect before me was an inevitable adjournment of a listed hearing that had been set down some weeks ago and that was ready to proceed, so as to permit the filing of multiple further interlocutory applications to raise a related but nevertheless different and far more complex interlocutory dispute.

32    I formed the view that the better case management decision was to hear and determine Zonia’s and the Baron applicants’ amended interlocutory applications without hearing and determining CBA’s interlocutory applications, on the basis that, if I were not persuaded that the Cooperative Case Management orders should be made, then the real contest was likely to be whether the Zonia proceeding or the Baron proceeding should be stayed, leaving the other to continue (in the case of the Baron proceeding, presumably in some modified form). In this connection, no party was advocating consolidation (including in the form that had previously been contemplated by Zonia and the Baron applicants) or suggesting that the Zonia proceeding and the Baron proceeding continue as separate proceedings without making the Cooperative Case Management orders (or some similar case management regime). I therefore saw the amended interlocutory applications as posing a threshold question which, if decided adversely to the Applicants, would lead to a further and more complex contest about which class action should continue and which class action should be stayed. That contest could be heard and determined at a later time if need be, prepared with the benefit of appropriate programming orders. On the other hand, if I were to be persuaded that the Cooperative Case Management orders should be made, then this held out the prospect (I say no more than that) that it may not be necessary to determine a further contest about which of the two proceedings should continue and which should be stayed, having regard to the reasons expressed for making the orders in question.

CBA’s submissions

33    CBA’s written submissions were directed, in large part, to the contention that there should not be two almost identical proceedings continuing side-by-side. These submissions were fashioned to advance CBA’s opposition to the making of the Cooperative Case Management orders and to support its applications for a stay of the Baron proceeding or for cost-limiting orders. As I have said, only the first of those matters is before me now. I will consider those submissions accordingly, in conjunction with the elaboration provided by CBA’s oral submissions made at the hearing on 11 March 2019. That said, CBA’s submissions squarely raise the issue of whether two proceedings should be countenanced. Therefore, in reaching a decision on whether the Cooperative Case Management orders should be made, the fact that there is a pending application to permanently stay the Baron proceeding cannot be ignored.

34    CBA submits, firstly, that it should not be vexed with the costs of defending multiple proceedings in respect of the same factual matters and causes of action, when one open class action would suffice to vindicate the prospective rights of the respective group members. CBA submits that the mere existence of joint activity, as contemplated by the Cooperative Case Management orders, heralds the incurring of unnecessary costs which would be avoided if the two proceedings were consolidated. Expressed in this way, CBA’s submission is predicated on the assumption that, in a consolidated proceeding, there would only be one firm of solicitors acting for the Applicants, not two (the basis on which the Applicants originally advanced their consolidation proposal). As I have said, no party actively advances the contention that the two proceedings should be consolidated—although I accept that this is a case management decision that would be open to me, regardless of the competing positions of the parties: see, however, the cautionary observations of the Full Court in Perera v GetSwift Limited [2018] FCAFC 202 (GetSwift) at [48] – [51] and of Beach J in McKay Super Solutions Pty Ltd (Trustee) v Bellamy’s Australia Ltd [2017] FCA 947 (Bellamy’s) at [14].

35    The gravamen of CBA’s submission was that, rather than minimising costs, the likelihood was that the Cooperative Case Management orders would increase costs by imposing a layer of joint activity across the two proceedings. In short, cooperation would come at its own cost. CBA expressed this as not only as a potential costs burden on it but also a particular costs burden on the group members in the Baron proceeding, who would be deprived of the benefit of scale that would be available if they were group members in the one, open class action where the costs burden would be distributed over a larger pool of group members and where the making of a common fund order would open that burden to the Court’s scrutiny.

36    Relatedly, CBA submits that these additional costs would be opaque and almost impossible to identify. Any attempt to identify them would be a costly exercise in itself. In oral submissions, CBA suggested that this difficulty was recognised by Beach J in McKay Super Solutions Pty Ltd (Trustee) v Bellamy’s Australia (No 2) [2019] FCA 215 (Bellamy’s (No 2)), although I doubt that this was the case. Indeed, as I will later explain, Beach J appears to have accepted that appropriate costs orders could be fashioned despite the difficulties that might exist where duplicative or unnecessary costs might have been incurred in permitting two class actions under Pt IVA to proceed against the one respondent.

37    Developing these concerns, CBA submits that the Applicants’ abandonment of their original consolidation proposal in favour of the Cooperative Case Management orders can only be seen as an opportunity to advance the interests of the “service providers” (the two litigation funders and the two firms of solicitors), not the group members. CBA submits that the foreshadowed harmonised pleadings reveal that the two proceedings are not intended to bring substantively different claims. Further, the proposal of the Cooperative Case Management orders is that the Applicants be represented by the same “counsel team”. As CBA puts it, should the Cooperative Case Management orders be made, the only difference for a group member would be the identity of that group member’s solicitor and litigation funder. It submits that this emphasised how, if granted, the present application only furthered the commercial interests of the service providers.

38    Secondly, CBA submits that the regime proposed by the Cooperative Case Management orders relies heavily on true cooperation between “the funders, lawyers, and the Applicants”—a prospect which, according to CBA, is unlikely to be realised if the conduct of the two proceedings to date is an indicator of the extent of future cooperation. CBA pointed to delay in the two proceedings, which it laid at the feet of the Applicants. It referred in particular to the delay in the Applicants proposing a joint approach to the conduct of both proceedings after the case management hearing on 24 August 2018, leading only to a consolidation proposal that was then abandoned without explanation. CBA submits that the Court could have no confidence that the Applicants, their solicitors or their funders will be able to cooperate across concurrent proceedings in a way that minimises wasted time and cost.

39    Relatedly, CBA raised what it describes as “real and unanswered questions” as to how the two proceedings will “work in practice”. I will not rehearse the various rhetorical questions that CBA posed. It argued that many of the questions would not arise if the proceedings were to be consolidated although, as I have said, it did not actively advance consolidation as a case management option. Lying behind its submission was the contention that the Baron proceeding should be permanently stayed.

40    Thirdly, CBA submits that making the Cooperative Case Management orders may reduce the prospect that the matter will settle. It suggests that reaching a settlement would be more difficult if CBA were to be faced with settling two proceedings rather than one. It submits that the process would be complicated by having “two sets of representative applicants, two law firms, and two sets of interested funders at (or behind) the negotiating table”. CBA argued that there was a distinct possibility that one group could form a view in favour of settlement while the other could form the contrary view.

41    At the hearing on 11 March 2019, CBA advanced other submissions but, to the extent necessary, these will be referred to in other sections of these reasons, as will the various further written submissions filed by the parties in the weeks following the hearing.

Recent cases

42    In GetSwift, three open class actions advancing substantially the same claims on behalf of the same group members were filed. None of the competing applicants contended that their action should continue other than as an open class action. The primary judge permanently stayed two of the competing class actions and permitted the third to proceed. On appeal, the Full Court expressed the opinion that the Court possesses the power to order a permanent stay of competing class actions, although it did not accept, as the primary judge did, that the source of that power was the prevention of an abuse of the Court’s process. Rather, the Full Court accepted that the Court has a general power to control its own proceedings, which extends to ordering either a permanent or temporary stay, as the occasion demands: see at [118] – [127].

43    The Full Court accepted that Pt IVA of the Act contemplates that there may be more than one proceeding against the same respondent in respect of the same subject matter and the same cause(s) of action. The Full Court also contemplated the possibility that, in given representative proceedings under Pt IVA, one or more group members may opt out and bring their own individual proceedings or, indeed, their own separate representative proceedings. In short, the structure of Pt IVA permitted multiple proceedings against the same respondent, including multiple representative proceedings: see at [146] – [147].

44    At [148], the Full Court said:

148    Part IVA does not evince a purpose to restrict or prevent claims involving a common issue being the subject of more than one class action and its object is to permit claims involving a common question to be litigated together rather than separately. Its object is facultative not restrictive. In permitting more efficient dispute resolution through group proceedings Part IVA does not insist on the most efficient means of dispute resolution. Put another way, not using the most efficient means of dispute resolution is not necessarily sufficient to constitute an abuse of process.

45    The Full Court went further to observe that it would not be an abuse of the Court’s process for multiple class actions to continue if all but one were closed and overlap were eliminated: see at [149]. The Full Court also observed that it is hard to see that it would be unjustifiably oppressive for the respondent to be subjected to the risk of duplicative costs when such duplication can be materially reduced or ameliorated by case management orders: see at [154].

46    Nonetheless, the Full Court recognised that the continuation of multiple class actions in respect of the same subject matter and cause(s) of action will throw up case management difficulties which will need to be resolved. The Full Court said (at [162]):

162    Where, as in the present case, there is no agreement between the competing funders and solicitors the Court must decide the best way to deal with the case management difficulties that are thrown up. That decision must be made in the particular circumstances of the case and commonly involves weighing up what may be incommensurable and sometimes conflicting considerations. There can be no one right answer to such questions and different judges may weigh the relevant considerations differently. That this is so can be seen in the variable approaches taken by different judges of the Court, including:

(a)     in Bellamy's Beach J was faced with two competing open shareholder class actions concerning the same subject matter and causes of action but with different applicants, solicitors and funders. In the circumstance that in each case a large number of group members had signed a funding agreement with a particular funder and a retainer with a particular law firm, his Honour decided not to permanently stay either of the actions and made orders to close the class in one proceeding, to allow the other proceeding to remain as an open class proceeding, and to have a joint trial of both proceedings. His Honour also made directions to minimise any duplication of work and expense by the law firms acting for the applicants in the two cases;

(b)     in Cantor Foster J was faced with five competing open class actions brought by two different law firms alleging that Volkswagen, Audi and Skoda engaged in misleading and deceptive conduct and made false and misleading representations about the emissions of affected diesel motor vehicles. His Honour did not accept the respondent's submission that allowing the continuation of two groups of class actions would, for the time being, unduly oppress the respondents nor that it was productive of undue costs, confusion or delay, and decided to adopt a ‘wait and see’ approach; and

(c)     in the present case the primary judge was faced with three competing open shareholder class actions with different applicants, solicitors and funders. His Honour decided that in the circumstances of the case the best option was to stay two of the proceedings, and after conducting a comparative assessment his Honour made orders for the Perera and McTaggart Proceedings to be stayed and for the Webb Proceeding to go forward.

47    In the present case, Bellamy’s has a particular focus because the Cooperative Case Management orders are based on the case management orders made by Beach J in that proceeding with some additions, such as an order that the Applicants jointly use their best endeavours to avoid duplication of work and progress the two proceedings in a cooperative manner. In Bellamy’s, Beach J also contemplated the possibility of other case management orders, including orders to ensure that the respondent was only exposed to one set of legal costs vis-à-vis the applicants in each of those proceedings, as if there had been only one set of proceedings: see at [7].

48    In Bellamy’s (No 2), the respondent sought cost-capping orders against the applicants. Beach J accepted that his prior rejection of the stay applications meant that the total costs incurred in the two class actions were likely to exceed the costs that would have been incurred if only one proceeding had been commenced or continued. But his Honour reasoned that he could not immunise the respondent from multiple representative proceedings (a proposition which the Full Court accepted in GetSwift): see at [14]. Further, his Honour did not regard the respondent as being entitled to avoid exposure to more than one proceeding. His Honour accepted that the prospect of duplicated costs could be significantly reduced through case management and cooperation between the applicants and their advisers—circumstances which his Honour found to have been demonstrated. In the event, Beach J refused the respondent’s cost-capping application, reasoning that the better approach was to deal retrospectively rather than prospectively with the costs questions that had been raised while, in the meantime, leaving in place a protocol to minimise or eliminate costs duplication to the extent feasible: see at [15] – [21].

49    CBA placed reliance on Moshinsky J’s decision in Impiombato v BHP Billiton Limited (No 2) [2018] FCA 2045 (BHP) to stay two of three competing open class actions commenced under Part IVA even though, in supplementary submissions made after the Full Court’s decision in GetSwift, one of the applicants, Klemweb Nominees Pty Ltd, stated that, as a fall-back position, it would be prepared to advance its action on a closed basis and, if necessary, adduce evidence to demonstrate the viability of that option. His Honour did not permit further evidence to be adduced but nevertheless dealt with the stay applications on the basis that the closed class option was a viable alternative.

50    At [155] – [157], his Honour said:

155    In the circumstances of this case, I do not consider it appropriate for the Klemweb proceeding to proceed on a closed class basis alongside the Impiombato proceeding. The claims of the group members in the Klemweb proceeding are (subject to opting out) covered by the Impiombato proceeding. To have both proceedings continue side-by-side would be likely to result in considerable duplication in legal work and thus increase the overall costs of the proceeding. While this would benefit the lawyers, it is unlikely to benefit the group members. Additional legal costs are likely to deplete any amount that is recovered by way of settlement or judgment. Further, having both proceedings continue side-by-side is likely to make the conduct of the proceedings less efficient than would otherwise be the case.

156    I note that in Bellamy’s an option along the lines proposed by Klemweb was adopted. However, as the Full Court in GetSwift emphasised, each case turns on its own facts and circumstances and determining how the proceedings should be constituted commonly involves weighing up what may be incommensurable and sometimes conflicting considerations. In GetSwift, the Full Court held that no error had been shown in the primary judge’s exercise of discretion (which was to stay two of the three proceedings). The Full Court also stated that, had error been shown, and the Full Court been called upon to exercise the discretion, it too would have stayed two of the three proceedings: at [163].

157    I am mindful of the fact that a substantial number of group members in the Klemweb proceeding have entered into a retainer with Maurice Blackburn, and that a permanent stay of the Klemweb proceeding would cut across those contractual arrangements. The retainer signed by those group members provides for the proceeding to be conducted on a no-win / no-fee basis, which is likely to be less expensive than the funding arrangement in the Impiombato proceeding. While the Court must be cautious about cutting across these contractual arrangements, in my view, the cost and inefficiency of having both the Impiombato proceeding and the Klemweb proceeding go forward side-by-side outweigh that consideration. The advantages in having only one of these proceedings go forward are considerable. I think this course is the preferable one in the interests of group members of both proceedings. Accordingly, I reject the option that the Klemweb proceeding continue on a closed class basis, and will permanently stay that proceeding. I will reserve liberty to apply in case there are any issues arising in relation to the permanent stay. For example, I note that the Klemweb retainer agreement contains a clause to the effect that the claimant instructs Maurice Blackburn to file an opt out notice on the claimant’s behalf in the event that the claimant is identified as a class member in a competing class action (clause 4.1(i)). If an issue arises in relation to this clause, it could be raised pursuant to the liberty to apply order.

51    The present case is distinguishable from Bellamy’s and BHP in that, from its inception, the Baron proceeding has only ever been a closed class action. Moreover, it appears to have been advanced substantially by institutional investors who can be taken to have been cognisant of the Zonia proceeding but who wished not to be part of that proceeding. Rather, they can be taken as having elected to choose their own legal advisers and to enter into their own funding arrangements with their own litigation funder. As I have said, and as Zonia argued at the hearing of this application, they have already made their own de facto election to opt out of the Zonia proceeding. Such a possibility was specifically contemplated by Beach J in Bellamy’s and by the Full Court in GetSwift as falling within the structure of Pt IVA of the Act.

The Litigation Protocol

Summary

52    Leaving to one side matters of detail or matters that are not central to my consideration, the salient features of the Litigation Protocol can be summarised as follows (capitalised expressions are defined in the protocol).

53    From the Commencement Date, the Applicants will, amongst other things, seek leave to file and serve Harmonised Pleadings (substantively identical pleadings) in both proceedings, and apply for case management orders to reduce the duplication of costs and effort so as to enable the Applicants to progress both proceedings in a cooperative manner. In this connection, it is agreed that evidence in one proceeding should be evidence in the other and that CBA is only required to produce one set of discovered documents in both proceedings.

54    A Litigation Committee will be formed comprising two lawyers appointed by Maurice Blackburn and two lawyers appointed by PFM. The Litigation Committee will be responsible for making major decisions; managing the litigation; determining the distribution and coordination of work between Maurice Blackburn and PFM; and coordinating the equal billing of disbursements incurred for the joint benefit of the Applicants.

55    The “major decisions” are described. They include decisions which relate to: any matters that are of significant importance to the conduct of the two proceedings; matters that require the Court’s approval; interlocutory applications, or the response to interlocutory applications filed by CBA; claims made in, or parties to, the Harmonised Pleadings; the making, acceptance or rejection of settlement offers and any terms of settlement; discovery to be sought from or negotiated with CBA; decisions to accept or amend the loss methodology used to calculate the damages claimed; the engagement of counsel; the engagement of independent expert witnesses or consulting experts (including the approval of the fee structure of any contracts or fee agreements); the filing of evidence from Experts or Consultants; the filing of lay evidence (other than from Zonia or the Baron applicants); decisions to issue notices or to respond to notices; and decisions to appeal or not to appeal from any judgment or order of the Court, or to defend or not defend any appeal brought by CBA. Other “major decisions” are identified.

56    The Litigation Committee will operate by unanimous agreement and on the basis of utmost good faith. A dispute resolution procedure is provided should the Litigation Committee be unable to reach unanimous agreement on any decision relating to the two proceedings. This procedure involves, firstly, referral to the two most senior counsel retained for the Applicants and then, failing unanimous agreement by them, to an independent adjudicator. The Applicants agree to be bound by the unanimous decision of the two counsel or the independent adjudicator, as the case might be. If the Litigation Committee or counsel do not think that it is appropriate that the dispute be determined by counsel, the dispute will be referred directly to an independent adjudicator for determination.

57    In respect of all matters that are common between the two proceedings, work will be distributed between the personnel of Maurice Blackburn and the personnel of PFM for the purpose of reducing duplication of costs and effort. The number and seniority of legal personnel conducting a task in relation to the common matters will be no more than if there was only a single representative proceeding against CBA.

58    Only one set of counsel will be briefed to act jointly for the Applicants. In relation to matters which are specific to Zonia or to the Baron applicants, and which are not in dispute as between those parties, the joint counsel can be briefed by either party. However, in respect of such matters which are in dispute as between those parties, other counsel is to be retained by the party in question (unless agreed otherwise).

59    As far as practicable, correspondence to CBA and the Court will be jointly sent on behalf of the Applicants, and approved by a Principal of each of Maurice Blackburn and PFM. Correspondence to Collective Group Members will be jointly sent in accordance with the same procedure. Maurice Blackburn will create and host an email account (the Joint Service E-mail Address) to allow correspondence to be received from the Court and the solicitors for the other parties to the litigation. The Joint Service E-mail Address will be configured so that any e-mail sent to it is immediately forwarded to each member of the Litigation Committee and other designated personnel.

60    Zonia will be liable for 50%, and the Baron applicants will be liable for 50%, of the disbursements incurred for the benefit of both proceedings.

61    Maurice Blackburn and PFM will use the Relativity electronic discovery software. This is to be managed by Maurice Blackburn (who will seek payment of professional fees), with SKY Discovery hosting the documentary evidence. A usage protocol, approved by the Litigation Committee, will be developed to ensure that a consistent approach is adopted for the management and usage of the document database.

62    The Litigation Protocol provides for agreed confidentiality with respect to information passed between the parties thereto.

63    The Applicants consider that the Litigation Protocol will benefit the group members in their respective proceedings.

The parties’ further submissions

64    It is appropriate that I now record the submissions that were made by the parties following the provision of the Litigation Protocol.

65    In its written submissions filed on 25 March 2019, CBA repeats and amplifies the substance of the submissions it advanced at the hearing. It submits that the Litigation Protocol only heightens its concerns about the Court making the Cooperative Case Management orders. It submits that the protocol makes it clear that the Applicants’ proposed course will result in significant duplication of legal work, with increased overall costs, increased wastage of the Court’s resources, and delay. In fact, it says that the Cooperative Case Management orders will work to the detriment of the parties, group members and the Court. It advances nine reasons.

66    First, CBA submits that the structure for decision-making under the Litigation Protocol creates the inevitability of increased costs and delay. It identifies 21 categories of “major decisions” referred to in the protocol that would fall for the Litigation Committee’s deliberations and suggests that these would, in practice, “cover nearly every legal or forensic decision that must be made in the proceeding”. It notes that the protocol allows for IMF and Therium to be involved in that decision-making process (as well as, of course, the Applicants themselves). It also notes that these might not be the only decisions made by the Litigation Committee. CBA submits that “(e)ach and every such decision will lead to a duplicative cost (even where there is ultimately agreement), and that cost will be hidden from the Court, group members and CBA”. CBA also argues that this cost would be “amplified” by the involvement of the two litigation funders “in so many forensic decisions”. CBA notes that the Litigation Protocol imposes no time constraints in making decisions, and suggests that the time for decision-making processes will be lengthened, compared with “a single proceeding with one litigation funder, one set of solicitors and the relevant Applicant(s)”.

67    Secondly, CBA submits that the procedures for dispute resolution are not conducive to facilitating the resolution of the two proceedings as quickly, inexpensively and efficiently as possible in accordance with s 37M of the Act. It submits that, given the number of forensic decisions that arise in complex litigation, and the number of persons proposed to be involved in that process in the instant case, it is “almost inevitable” that there will be a number of decisions referred to the dispute resolution process. CBA submits that there have been a “litany of delays” and examples of disagreement thus far, which indicate the likelihood of problems arising in the cooperative management of the two proceedings, as contemplated.

68    Thirdly, CBA submits that the additional costs and delay that will be produced by the Litigation Protocol will “produce absolutely no benefit to group members or CBA at all”. It submits that the Applicants have still not identified a single advantage of maintaining two identical proceedings—still less an advantage that counterbalances the detriments to which CBA refers.

69    In this connection, CBA argues that it is no answer for the Applicants to contend that group members have entered into contractual arrangements with the litigation funders to whom they should consider themselves to be bound. It says that the Court should not regard group members as “subject to whatever inequity might be inflicted on them by a funder because in a different context they have contracted with that funder”.

70    Fourthly, CBA submits that only the Applicants are parties to the Litigation Protocol. It queries how the respective firms of solicitors and the litigation funders will be bound by it.

71    Fifthly, CBA submits that the Litigation Protocol stands apart from the Cooperative Case Management orders sought by the Applicants in the interlocutory applications. Further, the Litigation Protocol can be terminated by the Applicants, even at a time when it might be difficult for the Court to retreat from a decision to allow two proceedings to continue side-by-side.

72    Sixthly, CBA submits that the Litigation Protocol highlights concerns about how the burden of solicitor costs and disbursements might fall on the group members. CBA submits that, under the Litigation Protocol, disbursements are to be borne on a 50/50 split. The relative costs burden of the group members in each proceeding remains in the hands of the solicitors involved via the Litigation Committee, without one firm being the “dominant” firm or having the primary carriage of any particular issue (such as discovery or expert evidence).

73    CBA argues that there are “problems” with this approach. It posits a situation where there is a proposed settlement sum offered in each proceeding. On the assumption that the number of group members in the Baron proceeding (the closed class) is a small fraction of the number of group members in the Zonia proceeding (the open class), CBA submits that it is entirely conceivable that the group members in the Baron proceeding could bear half the costs to that point, and thereby suffer a disproportionate reduction in any settlement sum received. CBA submits that this could adversely impact on the parties’ ability to achieve a settlement. It submits further that no evidence has been led to show that group members have made a choice as to how the costs burden could fall if the two proceedings were to continue under the Litigation Protocol.

74    Seventhly, CBA submits that it is notable that the Litigation Protocol seeks to protect IMF and Therium from costs exposure, while subjecting CBA to the duplicative costs of two sets of solicitors who only serve IMF’s and Therium’s interests. CBA submits that, if the Applicants are proposing to jointly take steps in both proceedings, then the funder ought to jointly have costs exposure to CBA’s costs in defending those proceedings, irrespective of the arrangement the Applicants have among themselves in relation to their own costs.

75    Eighthly, CBA submits that the arrangements proposed in the Litigation Protocol for discovery, insofar as it envisages the development of, and agreement to, a usage protocol and database to be implemented across personnel acting for the Applicants, is an example of the “inefficiencies and duplication which must arise” from the two proceedings continuing on foot.

76    Ninthly, CBA submits that the provision in the Litigation Protocol which permits the respective applicants to brief separate counsel in certain circumstances, will “inevitably lead to further inefficiencies and complications”.

77    In their answering submissions filed on 1 April 2019, the Applicants responded to each of the nine matters advanced by CBA.

78    The Applicants submit that CBA’s first submission (the complexity of the decision-making processes under the Litigation Protocol) is predicated on the “mistaken and impractical belief” that a single representative proceeding does not, itself, involve a process where lawyers and funders consider, discuss, decide upon, and where necessary approve, decisions in a way that is commonplace in complex commercial litigation—such as where decisions are required to be made in consultation with corporate general counsel, boards of directors and, frequently, insurers.

79    The Applicants submit further that CBA’s submission that “each and every decision will lead to a duplicative cost” is speculative and without an evidentiary foundation. The Litigation Protocol specifically provides that the legal personnel that will work on common matters will be no greater in number than if there was only a single, representative proceeding against CBA.

80    The Applicants also submit that, contrary to CBA’s submission, costs will not be “hidden” from the Court, group members or CBA. When considering the approval of a settlement in group proceedings in this Court, it is standard practice for a costs assessor to review, and report on, the reasonableness of the applicant’s costs. Further, should (in the present case) a judgment in favour of the Applicants be given, costs will be reviewed on a taxation of costs, if need be. The Applicants submit that any objection with respect to their costs can be ventilated at either of these junctures, with the benefit of knowing what costs have actually been incurred.

81    The Applicants submit that CBA’s second submission (the dispute resolution process) misstates how the dispute resolution procedure in the Litigation Protocol is to operate. The Applicants argue that the dispute resolution procedure is a “safety mechanism” to resolve “deadlocks”. It does not apply merely where there is disagreement. The Applicants submit that given the legal experience of the practitioners who will comprise the Litigation Committee, and their ethical responsibilities, there is no reason to suspect or speculate that any insoluble dispute will arise, let alone think that a number of decisions will be subjected to the dispute resolution process for which the protocol provides.

82    The Applicants submit further that there is no reason to think that decision-making under the Cooperative Case Management orders will, in any event, involve greater cost or delay than if there was only one proceeding. It is an inherent feature of any endeavour involving professional judgment that differences of view will emerge. Litigation is no exception and common experience shows that even in a single proceeding (including a single, representative proceeding) there can be differences of view (between solicitors comprising the team in the one firm and/or solicitors and counsel) as to how the litigation should proceed. The Applicants submit that there is no reason to think that, in the two proceedings conducted pursuant to the Cooperative Case Management orders and the Litigation Protocol, disputes requiring formal dispute resolution will necessarily occur.

83    Mr Watson’s and Mr Sandhu’s respective affidavits (filed after the hearing on 11 March 2019) were, in part, directed to CBA’s first two groups of submissions.

84    Mr Watson deposed that, in his experience in representative proceedings with joint or cooperative applicant parties represented by different firms of solicitors (whether consolidated proceedings or cooperative proceedings), the level of cost and delay portrayed in CBA’s submissions does not occur. He said that he has never directly encountered a situation where the applicant parties have been unable to resolve a dispute and have required recourse to a formal dispute resolution process (although he is aware of one instance where his firm was involved in a dispute resolution process where the dispute was determined by counsel retained by the applicant parties). He said that a formal dispute resolution process (of the type contained in the Litigation Protocol) is almost invariably never used in practice, but such a provision is considered necessary to be included in such a protocol to ensure that a pathway to formal dispute resolution is provided as a measure of last resort. He said that, in his experience, responsible practitioners acting in the interests of their group members will quickly and efficiently agree on decisions relating to the proceedings, in much the same fashion as occurs in a team meeting in major litigation conducted by and within a single firm.

85    Mr Sandhu deposed that, in cases conducted by a team of solicitors within the same firm, differences of opinion are commonly worked out within the team, with members advocating their positions, and listening carefully to the positions advocated by others. He said that, uncommonly, it may be necessary to seek advice from counsel briefed in the matter, where differences of opinion persist. Mr Sandhu said that he had no reason to believe that the position would be different in this proceeding, where the team would include lawyers from two firms.

86    Mr Sandhu also deposed, on information and belief (based on statements made by Mr Phi and Mr Finney), that Mr Phi’s and Mr Finney’s experiences of working on class action proceedings in which multiple firms act for the representative(s), accords with Mr Watson’s experience, summarised above.

87    As I have said, CBA objected to this evidence, not least because the two affidavits were filed without leave after the conclusion of the hearing on 11 March 2019: see the observations of Mason J in Carr v Finance Co of Australia Ltd (1981) 147 CLR 246; 34 ALR 449 at 258, which apply equally in this Court. CBA submits that Mr Watson’s opinion is given on a matter in respect of which “the Court needs no assistance”. It also submits that Mr Watson has not identified a proper basis for his opinion. He does not identify the circumstances of the proceedings he is referring to or what occurred in them.

88    CBA submits that Mr Sandhu’s opinion is clearly inadmissible; it is no more than his say-so. CBA also submits that Mr Sandhu’s evidence on information and belief rises “no higher than hearsay evidence as to the opinion of 2 other persons”.

89    In response, the Applicants submit that Mr Watson’s evidence is based on his significant experience in representative proceedings, which is referred to in his earlier affidavits (read on the application) to which no objection was taken. I will admit Mr Watson’s evidence. In doing so, I accept that it is expressed at a relatively high level of generality. Nonetheless, it is of some probative value.

90    The Applicants said that they are content for Mr Sandhu’s opinion to be taken as a submission. I will treat it accordingly. As to the evidence on information and belief, the Applicants submit that the fact that the evidence is hearsay does not mean that it is inadmissible on this application: see s 75 of the Evidence Act 1995 (Cth). I accept that submission. Once again, even though the evidence is of a hearsay character, it is of some probative value and confirms Mr Watson’s experience.

91    The Applicants submit that CBA’s third submission (no benefit to group members) ignores the obvious right of parties to commence proceedings with representatives of their choosing. Further, the Applicants argue that CBA’s submission does not explain why parties should be deprived of this right when Part IVA of the Act contemplates the possibility of multiple representative proceedings.

92    The Applicants submit that CBA’s fourth submission (only the Applicants are parties to the Litigation Protocol) ignores the fact that Maurice Blackburn and PFM act, respectively, on instructions from Zonia and the Baron applicants, respectively.

93    The Applicants submit that CBA’s fifth submission (the Litigation Protocol stands apart from the Cooperative Case Management orders) is irrelevant and wrong. Under the Litigation Protocol, the Applicants are required to give notice to the Court and CBA should they terminate it. In the meantime, they will continue to be bound by the Cooperative Case Management orders.

94    The Applicants submit that CBA’s sixth submission (possibly disproportionate burden of costs on group members in the different proceedings) raises a matter that is not CBA’s concern and is, in any event, fraught with “multiple difficulties”.

95    As to the question of how disbursements are to be borne, CBA’s complaint appears to be that the group members in the Baron proceeding may be prejudiced by a 50/50 split because they represent less than 50% by number of all group members across the two proceedings. The Applicants submit that CBA’s submission:

(a)    overlooks the fact that, absent cooperation, the group members in the Baron proceeding will bear 100% of the disbursements in that proceeding, which may not be much (if at all) less than the total disbursements in the two proceedings conducted under the Litigation Protocol; and

(b)    assumes that disbursements should be allocated by reference to numbers of group members as opposed to the respective sizes of the two groups’ claims (the group members in the Baron proceeding include a number of large institutions with very substantial claims).

96    As to the question of costs more generally, the Applicants submit that it cannot be known in advance what specific tasks will be required in preparing the Applicants’ respective cases, or how those tasks are to be divided up. The Applicants submit that work allocation is best worked out iteratively and the Applicants well understand their obligations to cooperate so as to efficiently advance matters without duplication of work.

97    The Applicants also submit that there is no substance to the suggestion that their proposal could adversely impact the ability of the parties to achieve a settlement. They submit further that the Court has power under s 33V of the Act to approve any costs and how they should be allocated to ensure fair treatment for all group members.

98    The Applicants submit that CBA’s seventh submission (protection of Therium and IMF from costs exposure) is misconceived because the Litigation Protocol does not protect, and cannot protect, the litigation funders from costs exposure. The Court’s discretion to approve costs upon any application for settlement approval, or to award costs upon a final determination, is not fettered by the protocol.

99    The Applicants submit that CBA’s eighth submission (the cost of arrangements for discovery under the Litigation Protocol) overstates the work required and the attendant cost. Once again, Mr Watson’s and Mr Sandhu’s affidavits address this point. Mr Watson says:

In relation to clause 9.2 of the Protocol regarding a Relativity usage protocol, based on my experience, such protocols are routinely drafted and applied internally at Maurice Blackburn in representative proceedings so as to ensure a consistent approach by the relevant legal team in their review and management of discovery. Such protocols would ordinarily set out rules and guidelines on how document reviewers ought to treat certain categories of documents and provide a taxonomy of relevant issues in the proceeding. Therefore, even if this proceeding were to be conducted as a single proceeding, an internal Relativity usage protocol would need to be drafted in any event and the costs of doing so would not be materially different to what is proposed under the Protocol.

100    Mr Sandhu’s evidence is to the same effect: there will always be a team of lawyers and paralegals undertaking discovery review and it will be necessary to have a discovery protocol to ensure that documents are coded by that team, both by reference to their degree of relevance and their subject matter, in a uniform way.

101    The Applicants submit that CBA’s ninth submission (possible engagement of separate counsel in certain circumstances) is of no weight because, just as it is responsible to include deadlock-resolution mechanisms in the Litigation Protocol, so too it is responsible to include provision for separate representation should the interests of Zonia and the Baron applicants diverge. In this connection, the Applicants submit that if, for example, CBA persists with a “divide and conquer” strategy to stay the Baron proceeding, there would be a divergence of interests. I note, once again, that this possibility was foreshadowed by Zonia and the Baron applicants at the hearing on 11 March 2019: see [30] above.

102    Finally, the Applicants submit that CBA’s criticisms should be seen against the background that on 6 December 2018 (when consolidation of the two proceedings was in prospect) it described the proposed consolidation as “a positive step” and “desirable”, even though the then consolidation proposal envisaged that Zonia and the Baron applicants would continue as applicants, with the two firms of solicitors and the two litigation funders, all of whom would need to cooperate with each other. Although at that time they raised certain cost concerns, there was no suggestion by CBA that these concerns meant that consolidation should not be ordered.

consideration

103    I have set out the parties’ respective submissions in some detail to show the dimensions of the present debate. But, essentially, it is about the likelihood of increased or duplicated costs, relative inefficiency, and possible delay in the conduct of the proceedings should the two proceedings continue under the Cooperative Case Management orders implemented through the Litigation Protocol, and whether those matters militate against the Cooperative Case Management orders being made.

104    For CBA, the comparison against which this debate takes place is a single representative action—the Zonia proceeding in which the group members comprise the aggregate group members in the Zonia proceeding and the Baron proceeding, with the group members represented by a single firm of solicitors and funded by a single litigation funder.

105    There is, with respect, an air of unreality in that comparison. As I have noted, Pt IVA of the Act contemplates the possibility, and does not prohibit, multiple representative proceedings in which the same underlying causes of action and claims for relief are advanced. And, as I have also noted, the present case is distinguishable because, from its inception, the Baron proceeding has only ever been a closed class action in which the group members—or at least a substantial section of the group members—can be taken to have made the conscious decision not to be part of the Zonia proceeding. Once again, these group members have already made their own de facto election to opt out of the Zonia proceeding.

106    I will consider CBA’s submissions on the question of increased or duplicated costs, relative inefficiency and possible delay in greater detail below. But, for present purposes, I am provisionally of the view that the concerns it has raised in that regard are not of such weight or substance that they alone would stand as a cogent reason to permanently stay the Baron proceeding, particularly having regard to the circumstances in which that proceeding was commenced. Having said that, I accept that the maintenance of two representative proceedings against CBA will likely result in an additional costs burden for it. But it certainly does not follow from that fact that one of those proceedings, let alone the Baron proceeding, should be stayed. Part IVA of the Act does not confer a right on a respondent to be sued only in one proceeding or otherwise insulate it from the costs consequences of multiple proceedings being brought. Nevertheless, if cooperative case management (of the kind proposed) results in an unwarranted or undue burden of costs falling on CBA, then this can be remedied by the Court making costs orders that are just and appropriate in the circumstances. This is the perspective from which the Cooperative Case Management orders and the Litigation Protocol should be considered.

107    Absent a principled basis and cogent reason for staying the Baron proceeding, the question is: how should the two proceedings be best managed? It is this very question which informed the making of the Court’s orders on 31 July 2018: see [12] above.

108    One possibility would be to consolidate the two proceedings. However, as I have already said, no party (not even CBA) urges that step on the Court. As I have said, I accept that consolidation of the two proceedings remains in the Court’s armamentarium, despite the respective positions of the parties. But I would be reluctant to order consolidation when no party advances it (or supports it) and where, as presently advised, I see no real advantage in taking that step.

109    In this connection, it is not to be assumed that consolidation would overcome the concerns that CBA advances. For example, it should not be assumed that consolidation would mean that there would not be joint solicitors on the record for the Applicants. Indeed, there is every reason to think that there would be a sound basis for allowing joint representation in a consolidated action in the present case, given (once again) the circumstances in which the Baron proceeding was commenced.

110    Absent cooperation between the Applicants in the conduct of the two proceedings, such as now proposed, there will inevitably be a large amount of duplicated work undertaken in respect of the management of the two proceedings, and in preparing and presenting the two cases at trial. Much of this duplication can be avoided if the work required is undertaken cooperatively on a joint basis. And if the duplication of work and resources can be avoided as is now proposed, it can be expected that overall costs will be correspondingly reduced. This outcome would be to the advantage of all parties, in particular CBA. It would also be of advantage to the Court by avoiding, to the extent possible, an inefficient call upon, and use of, the Court’s resources in case managing and hearing the two proceedings separately, including in relation to interlocutory disputes. Because the Cooperative Case Management orders and the Litigation Protocol seek to secure these advantages, they are directed to achieving the overarching purpose of the civil practice and procedure provisions of the Act and Federal Court Rules 2011—not the contrary.

111    I accept that the Cooperative Case Management orders and the Litigation Protocol impose a layer of joint activity across the two proceedings which might, in its own right, have the potential to add to overall costs and, possibly, to produce some delay. However, CBA greatly overstates that potential.

112    In the main, I accept the Applicants’ submission that there is no reason to think that decision-making under the Cooperative Case Management orders and Litigation Protocol will necessarily involve greater costs or delay than if there was only one representative proceeding on foot. I have no reason to doubt that the participants in the Litigation Committee will approach their task professionally and ethically. The decisions they will make are no different in kind to the decisions that would need to be made if the litigation were to be conducted by a team of lawyers and paralegals within the one firm. The Litigation Protocol envisages that the number and seniority of legal personnel conducting a task in relation to common matters will be no more than if the litigation were conducted on that basis. The only difference is that, under the Cooperative Case Management orders and Litigation Protocol, the team will be spread across two firms, not one. Further, there is no reason to think that the decisions of the Litigation Committee cannot be made efficiently and in a timely manner.

113    The provisions in the Litigation Protocol for dispute resolution are prudent. At the present time, there is no reason to think that disputes will be rife, as CBA’s submissions tend to suggest. I do not accept, for example, that it is “almost inevitable” that there will be a number of decisions referred to the dispute resolution process. Further, at the present time there is no reason to think that if there is a dispute, it cannot also be resolved quickly and efficiently. I do not accept that the dispute resolution procedures necessarily promote the potential for delay. To the contrary, they provide a pathway for efficient dispute resolution, if needed.

114    If the deliberations of the Litigation Committee are greater than might be reasonable for ordinary case management of litigation of this kind or if there is reason to think that the Cooperative Case Management orders as implemented through the Litigation Protocol have engendered disputes above and beyond those that might be expected in any team-conducted litigation—thereby indicating, in each case, a possibly increased and undue cost imposition—then these matters can be addressed like any other costs issue and, if necessary, redressed by appropriate remedial measures when required. The Court is not powerless to act in this regard.

115    As to the potential for delay, it is to be born in mind that with or without the Cooperative Case Management orders and the Litigation Protocol, the conduct of the two proceedings is under the control of the Court. The Court will make programming orders of a kind which it considers are best-suited to achieving the overarching purpose referred to in s 37M of the Act. It is the Court’s expectation that its programming orders will be complied with within the times it specifies. If a party fails to comply with such orders without just cause or reason, it will do so at its own risk. The parties can expect that the Court will not allow the Cooperative Case Management orders or the Litigation Protocol to stand as impediments to the Applicants’ due compliance with its programming orders. However, as I have said, at the present time there is no reason to think that the decisions of the Litigation Committee cannot be made efficiently and in a timely manner or that, if there is a dispute, it cannot be resolved quickly and efficiently.

116    What is abundantly clear is that, whatever potential might exist for increased costs or some possible delay, that potential is far outweighed by the benefits that the Cooperative Case Management orders and Litigation Protocol will almost certainly bring to the proceedings. These benefits are manifest and obvious from the summaries I have provided at [19] – [20] and [52] – [63]. They do not require elucidation. I am persuaded that it is appropriate that the Cooperative Case Management orders should be made.

117    There are some further miscellaneous matters I should address.

118    First, contrary to CBA’s submissions, I do not accept that conduct of the two proceedings in accordance with the Cooperative Case Management orders and Litigation Protocol is likely to impede the prospect of settling the two proceedings (should that opportunity arise) or unduly inhibit negotiations in that regard.

119    Secondly, I do not think it is of particular concern that the solicitors and litigation funders are not parties to the Litigation Protocol. The Cooperative Case Management orders will be binding on the Applicants and it is the Applicants who are responsible for instructing their respective solicitors. I accept that it is the intention of the Applicants to act in accordance with the Litigation Protocol and I have no reason to think that they will not instruct their respective solicitors accordingly. Further, I have no reason to think that the solicitors will not act in conformity with those instructions. That said, for the sake of good order, the Cooperative Case Management orders should identify the Litigation Protocol and make clear that, subject to further order, the Applicants are bound to comply with it.

120    Thirdly, the questions of how the burden of costs is to fall on CBA, or how the burden of costs is to fall on the Applicants and group members, are separate matters which can be addressed separately. They do not stand as reasons for not making the orders that are sought.

121    Fourthly, I do not see the arrangements proposed in the Litigation Protocol in respect of discovery as an example of what CBA says are “inefficiencies and duplication which must arise”. I accept that the arrangements proposed are beneficial. I also accept that they are arrangements which would need to be put in place even if there was one representative proceeding with one firm of solicitors engaged.

122    Fifthly, I do not accept that the provisions in the Litigation Protocol as to the briefing of counsel would in any way lead to “further inefficiencies and complications”. I accept the Applicants’ submission that it is responsible to include a provision for separate representation should the interests of Zonia and the Baron applicants diverge on any material question.

Disposition

123    I will make the Cooperative Case Management orders as sought, subject to a drafting amendment that links the orders to the Litigation Protocol.

124    The question of CBA’s interlocutory applications remains. CBA should now consider whether, and to what extent, it wishes to pursue the relief claimed in those applications, having regard to these reasons. If those applications are to be pursued in some form, the parties should endeavour to agree on programming orders that are appropriate to bring them into readiness for hearing. Agreed orders or, if agreement cannot be reached, the parties’ respective draft orders, are to be provided to my Associate by no later than 4.00 pm on 23 July 2019.

Associate:    

Dated:    10 July 2019