Federal Court of Australia

Davaria Pty Limited v 7-Eleven Stores Pty Ltd (No 7) [2020] FCA 1487

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to section 25(6) of the Federal Court of Australia Act 1976 (Cth) and rule 30.01 of the Federal Court Rules 2011 (Cth):

(a)    the following question, as set out in paragraph 1 of the interlocutory application of the First Respondent (7-Eleven) filed on 7 August 2020 (Interlocutory Application), be reserved for determination by the Full Court of this Court:

Does the Federal Court of Australia have power pursuant to sections 33V, 33Z or 33ZF of the Federal Court of Australia Act 1976 (Cth) to make a Common Fund Order upon the settlement or determination of this proceeding?

(b)    the application for the declaratory relief sought in paragraph 2 of the Interlocutory Application be reserved for determination by the Full Court of this Court,

(together, the CFO Issues).

For the purposes of the determination of the question, “Common Fund Order” has the meaning given to that term in the Interlocutory Application, being “an order of the Court that provides for the quantum of the remuneration of the third-party litigation funder, Galactic Seven Eleven Litigation Holdings LLC (Galactic), to be fixed as a proportion of any moneys ultimately recovered in this proceeding, for all group members in this proceeding to bear the same proportionate share of that liability, and for that liability to be discharged as a first priority from any moneys so recovered”.

2.    Leave is granted to Dr Oren Bigos SC to be appointed and act as contradictor in respect of the CFO Issues.

3.    The hearing of the CFO Issues is listed for 10.15 am on 27 October 2020.

4.    Pursuant to rule 9.12 of the Federal Court Rules 2011 (Cth), Galactic Seven Eleven Litigation Holdings LLC (Galactic) has leave to intervene in this proceeding in respect of the CFO Issues.

5.    By 7 October 2020, 7-Eleven is to file and serve any outline of submissions in respect of the CFO Issues (limited to 20 pages) and any supporting affidavit material.

6.    By 16 October 2020, Dr Oren Bigos SC is to file and serve any outline of submissions in answer in respect of the CFO Issues (limited to 20 pages) and any supporting affidavit material.

7.    By 20 October 2020, 7-Eleven is to file and serve any outline of submissions in reply (limited to 10 pages).

8.    By:

(a)    16 October 2020, 7-Eleven is to provide Dr Oren Bigos SC with a draft index to an electronic application book, such application book to include the submissions and affidavit material on which 7-Eleven and Dr Oren Bigos SC rely in respect of the CFO Issues.

(b)    19 October 2020, Dr Oren Bigos SC is to provide 7-Eleven with any comments on that index.

(c)    22 October 2020, 7-Eleven is to file and serve an electronic application book in PDF format.

9.    By:

(a)    19 October 2020, 7-Eleven is to provide Dr Oren Bigos SC with a draft index to a joint folder of authorities.

(b)    20 October 2020, Dr Oren Bigos SC is to provide 7-Eleven with any comments on that index.

(c)    22 October 2020, 7-Eleven is to file and serve an electronic joint folder of authorities in PDF format.

10.    10. Costs reserved.

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

REASONS FOR JUDGMENT

MIDDLETON J:

INTRODUCTION

1    On 2 October 2020, I made orders in this proceeding. These are the reasons for those orders.

2    By paragraph 1 of the interlocutory application dated 7 August 2020, the first respondent (‘7-Eleven’) seeks that I reserve the following question (‘Question’) to the Full Court pursuant to s 25(6) of the Federal Court of Australia Act 1976 (Cth) (the ‘FCA Act’):

Does the Federal Court of Australia have power pursuant to ss 33V, 33Z or 33ZF of the FCA Act to make a Common Fund Order upon the settlement or determination of the proceedings?

3    A ‘Common Fund Order’ is defined in the application as follows:

An order of the Court that provides for the quantum of the remuneration of the third-party litigation funder, Galactic Seven Litigation Holdings LLC, to be fixed as a proportion of any moneys ultimately recovered in this proceeding, for all group members in this proceeding to bear the same proportionate share of that liability, and for that liability to be discharged as a first priority from any moneys so recovered.

4    7-Eleven also seeks:

(a)    in the alternative, a declaration that the Court does not have power pursuant to ss 33V, 33Z or 33ZF of the FCA Act to make a Common Fund Order upon the settlement or determination of this proceeding (the ‘Declaration’); or

(b)    further or in the alternative, that I reserve the application for the Declaration to the Full Court pursuant to s 25(6) of the FCA Act and r 30.01 of the Federal Court Rules 2011.

5    This is a representative proceeding under Part IVA of the FCA Act. The proceeding has been set down for trial in August 2021 and I have referred the parties for mediation to be conducted by 30 April 2021.

6    At the case management hearing on 24 July 2020, the applicants sought leave to notify group members under ss 33X and 33Y of the FCA Act that “if the class action is successful (that is, if monetary compensation is recovered), the Court might be asked to make a Common Fund Order)” (submissions filed by the applicants on 23 July 2020). The applicants later withdrew the application.

7    On 14 September 2020, the legal representatives of 7-Eleven sought undertakings from the applicants and the litigation funder, Galactic Seven Litigation Holdings LLC (‘Galactic’), to the effect that they would not seek a Common Fund Order upon the settlement or determination of the proceeding. The applicants and Galactic did not agree to give such undertakings.

8    At the hearing before me on 29 September 2020, the applicants adopted a neutral position and did not seek to be heard in respect of the application. The applicants also indicated that, in the event I were to reserve the Question or Declaration to the Full Court, the applicants would file a submitting appearance save as to costs.

9    Galactic was granted leave to intervene at the hearing. Dr Bigos SC appeared on behalf of Galactic. Galactic also filed written submissions opposing the application, the principal ground for opposition being that the Question is a hypothetical issue and not apt for judicial determination (submissions filed by Galactic on 21 September 2020 (‘Galactic Submissions’) at [3]-[5], [10]-[14]). In its submissions (at [4]), Galactic stated that it had not yet decided whether to apply to the Court for a Common Fund Order at settlement or determination of the proceeding but reserved its right to do so in the future.

10    Prior to the hearing, Galactic indicated that, in the event I were to reserve the Question or Declaration to the Full Court, it would seek leave to intervene and oppose the relief sought by 7-Eleven. However, after the hearing, Galactic subsequently indicated that it would neither oppose 7-Eleven nor seek to be heard before the Full Court. In the absence of a natural contradictor, 7-Eleven proposes that, if the matter is to be reserved to the Full Court, Dr Bigos SC be appointed separately as a contradictor. The proposed appointment is not opposed by the applicants or Galactic.

11    For the reasons set out below, I have determined that it is appropriate to reserve the Question and the application for the Declaration to the Full Court and appoint Dr Bigos SC as contradictor.

RELEVANT PRINCIPLES

Reserving a question under s 25(6) of the FCA Act

12    Section 25(6) of the FCA Act provides that a single judge of the Court “may state any case or reserve any question concerning a matter” to the Full Court, which then has jurisdiction to hear and determine the case or question.

13    In Barton v Westpac Banking Corporation (1983) 76 FLR 101 (‘Barton’), Sheppard J (at 117-118) described an earlier enactment of s 25(6) as “a general provision relating to all matters which are before a single judge of the court”. The provision has since been amended so as to expressly include, rather than exclude, matters where an appeal to the Full Court would not be available, but Sheppard J’s description of the provision remains accurate.

Considerations relevant to the exercise of discretion

14    As observed by Sheppard J in Barton (at 118), a single judge has a wide discretion as to whether to reserve a question to a Full Court. In Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 (No 2) [2008] FCA 1006 at [10], McKerracher J set out six considerations which may be relevant to the exercise of discretion under s 25(6) of the FCA Act:

(a)    whether the judge considers that it is convenient to reserve the question, for example having regard to the point at which it arises, the strength of the point, because it raises unusual difficulties or because there are conflicting decisions;

(b)    whether there are any similar authorities on the question of law;

(c)    whether they have been determined with the benefit of full argument;

(d)    the nature of the point of law to be decided, that is whether it is confined to a specific point of statutory interpretation;

(e)    costs and delay; and

(f)    administration of the Court.

The requirement for the question to concern a ‘matter’

15    The requirement that the question to be reserved must concern a ‘matter’ recognises that the judicial power of the Commonwealth does not extend to giving of advisory opinions but is confined to determining controversies known as ‘matters’: Clarence City Council v Commonwealth of Australia [2020] FCAFC 134 (‘Clarence’) at [50]. As recently stated by the Full Court in Clarence, a ‘matter’ has two elements: “subject matter” and “justiciability”: Clarence at [52] citing CGU Insurance Limited v Blakely (2016) 259 CLR 339 (‘CGU’) at [27].

16    The “subject matter” element is satisfied if the subject matter of all claims made within the scope of the controversy is one that satisfies at least one of the descriptions in sub-ss 39B(1A)(a), (b) or (c) of the Judiciary Act 1903 (Cth).

17    The Full Court in Clarence has recently set out the following principles in relation to the “justiciability” element of a matter:

(a)    there must be “a justiciable controversy, identifiable independently of the proceedings which are brought for its determination and encompassing all claims made within the scope of the controversy”: at [54] citing Fencott v Muller (1983) 152 CLR 570 at 603;

(b)    the controversy must be “real and immediate”: at [54] citing Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 2019 CLR 372 (‘Re McBain’) at [242] (Hayne J);

(c)    there must be “some immediate right, duty or liability to be established by the determination of the Court”: at [56] citing In re Judiciary and Navigation Acts (1921) 29 CLR 257 at 265; and

(d)    there must be an appropriate remedy availability to the moving party: at [56] citing Truth About Motorways Pty Ltd v Macquarie Infrastructure Management Ltd (2000) 200 CLR 591 at [48]-[49] (Gaudron J); Re McBain at [244].

The availability of declaratory relief

18    Under s 21 of the FCA Act, the Court has power to grant a declaration without other relief. However, before doing so, I must be satisfied that the question to be resolved is real and not theoretical and that the person raising it has a real interest to do so: National Australia Bank Limited v Nautilus Insurance Pte Ltd (No 2) (2019) 377 ALR 627 (Allsop CJ at [99]) (‘NAB’) citing Forster v Jododex Australia Pty Ltd (1972) 127 CLR at 437.

19    In Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, the plurality of the High Court (Mason CJ, Dawson, Toohey and Gaudron JJ at 582) set out the principles in relation to the availability of declaratory relief, including that such relief will not be granted if the question is “purely hypothetical”, “claimed in relation to circumstances that [have] not occurred and might never happen”, or if “the Court’s declaration will produce no foreseeable consequences for the parties” (citations omitted).

20    In Edwards v Santos Ltd (2011) 242 CLR 421 (‘Edwards v Santos’), the High Court considered whether this Court’s jurisdiction to grant a declaration included a power to declare that conduct that had not yet taken place would be a nullity at law. In that case, the plaintiffs had sought a declaration as to whether the defendants had a right to apply to the Minister and be granted a lease under s 40 of the Petroleum Act 1923 (Qld). At the time that the declaration was sought, the defendants had not applied to the Minister. However, the plaintiffs contended that the issue would impact contractual negotiations between the parties relating to an indigenous land use agreement.

21    In dealing with an argument that the declaration had no foreseeable consequences and was hypothetical, Heydon J in Edwards v Santos (with the agreement of French CJ, Gummow, Crennan, Kiefel and Bell JJ) said (at 436 [37]):

…The questions which the plaintiffs wished to agitate were not hypothetical. The first defendant’s letter of 4 November 2005 had sufficiently indicated the intention of the petroleum defendants to make an application to the Minister under s 40 of the Petroleum Act and it had predicted that success would be “automatic”. If so, the plaintiffs would be seriously disadvantaged because their negotiating position would be gravely weakened; if not, the plaintiffs would be correspondingly better off. If the plaintiffs obtained the first declaration sought, it would produce foreseeable consequences for the plaintiffs and the petroleum defendants by allowing them to continue the process of negotiating the new [indigenous land use agreement] armed with knowledge of the correct legal position…

22    As Allsop CJ has observed in NAB (at [105]-[106]), the declaration sought in Edwards v Santos was directed to establishing a legal certainty which was relevant to the respective bargaining positions of the parties, and this “was a practical and real consequence about the future course of affairs between parties to a controversy that gave a real interest to seeking a legal answer by declaratory relief”. Chief Justice Allsop further noted (at [115]) that the consequence of the declaration was such that “the parties [would] have the correct legal foundation for the resolution or negotiation of a settlement of the claim.”

23    Similarly, in CGU, Nettle J noted (at 373 [102]):

…the court does not lack jurisdiction to make a declaration concerning a theoretical issue, in the sense of an issue that does not presently exist but which is likely to arise in future, where the issue is productive of a real and pressing dispute, is of real practical importance or is one in which the claimant has a real commercial interest.

24    A final declaration may be granted prior to the conclusion of the entire proceeding and it is not uncommon for some issues to be determined in advance of the other issues in a proceeding: Kinsella v Gold Coast City Council (2015) 1 Qd R 274 at [66] and [72].

25    An example of such an order in a representative proceeding is provided by Matthews v SPI Electricity Pty Ltd (No 5) (2012) 35 VR 615 (‘Matthews’), where Forrest J made a declaration as to the potential costs liability of a sample group member. In Matthews, Forrest J (at 623 [34]) described the making of the declaration as "a practical and sensible suggestion designed to facilitate a decision by the sample group members as to whether to participate in the trial". His Honour held (at 623 [33]-[34]) that group members contemplating engaging in the proceeding should not be “left in the dark” and ought to know whether they, like the applicant, would be at risk of a costs application if their claim failed. His Honour expressed the view (at 625 [41]) that it was not inappropriate or beyond the power of the Court to make the declaration.

CONSIDERATION

26    In light of the principles referred to above, I am satisfied that it is appropriate to reserve the Question and the application for the Declaration to the Full Court for determination. I summarise my reasons as follows.

(a)    The Question is the subject of conflicting judgments. As set out in further detail in paragraphs 28-30 below, a number of judges of this Court have expressed the view that the decision of the High Court in BMW Australia Ltd v Brewster (2019) 374 ALR 627 (‘Brewster’) does not foreclose making a common fund order at settlement. However, in Cantor v Audi Australia Pty Ltd (No 5) [2020] FCA 637 (‘Audi’), Foster J expressed a contrary view.

(b)    The scope of the Question is confined and it is a discrete question of law.

(c)    The Question is likely to have a material impact on settlement negotiations, including those as part of the mediation to occur prior to 31 April 2021. With this in mind, it is desirable for the Question to be resolved by the Full Court in advance of the mediation so that the parties can have greater certainty in preparing their respective bargaining positions, and to avoid any disruptions to the Court timetable that may arise if the Question were raised for consideration at a later date.

(d)    I am satisfied that the Question concerns a ‘matter’ for the purposes of s 25(6) of the FCA Act. The principles in relation to the Court’s jurisdiction to grant declaratory relief outlined in paragraphs 18-25 above support my conclusion that the Question concerns a ‘matter’ and that it is appropriate to reserve the Question and application for the Declaration to the Full Court.

27    It may be useful to expand on points (a), (c) and (d).

The Question is the subject of conflicting judgments

28    In Brewster, the plurality of the High Court (Kiefel CJ, Bell and Keane JJ at [1]) described a ‘common fund order’ as an order that:

is characteristically made at an early stage in representative proceedings and provides for the quantum of a litigation funder's remuneration to be fixed as a proportion of any moneys ultimately recovered in the proceedings, for all group members to bear a proportionate share of that liability, and for that liability to be discharged as a first priority from any moneys so recovered.

29    Brewster involved an appeal from a decision of the Full Court of this Court in Westpac Banking Corporation v Lenthall (2019) 265 FCR 21 and an appeal from a decision of the NSW Court of Appeal in BMW Australia Ltd v Brewster (2019) 366 ALR 171. In Brewster, the High Court held that neither this Court nor the NSW Supreme Court had power to make the common fund orders sought in those class actions, each of which was proposed at an early stage of the representative proceeding.

30    Since Brewster, a number of single judges of this Court have considered whether the Court has power to make a common fund order at the conclusion of a representative proceeding. Many have expressed the view, albeit with varying degrees of certainty, that Brewster leaves open the power of the Court to make a common fund order at settlement: see, for example, McKay Super Solutions Pty Ltd (Trustee) v Bellamy’s Australia Ltd (No 3) [2020] FCA 461 (Beach J), Fisher (trustee for the Tramik Super Fund Trust) v Vocus Group Ltd (No 2) [2020] FCA 579 (Moshinsky J) (‘Vocus’), Uren v RMBL Investments Ltd (No 2) [2020] FCA 647 (Murphy J); Lenthall v Westpac Banking Corporation (No 2) (2020) 144 ACSR 573 (Lee J). See also Clime Capital Ltd v UGL Pty Ltd [2020] FCA 66 (Anastassiou J) (‘UGL’); Evans v Davantage Group Pty Ltd (No 2) [2020] FCA 473 (Beach J).

31    However, in Audi, Foster J expressed a contrary view. Foster J (at [355]) distilled the following principles as emerging from the judgment of the plurality in Brewster (emphasis in original):

(a)    The plurality remarked that the lead applicants ought not necessarily bear the entire costs of the proceeding. That remarks suggests that, in an appropriate case, the lead applicant should bear such costs;

(b)    The making of a [funding equalisation order] addresses the question of “free riders”;

(c)    There is no reason why additional amounts deducted from unfunded group members’ awards should then be paid to a litigation funder at any time, let alone at the outset of a proceeding;

(d)    The litigation funder has no right to such money under contract or under equitable principles; and

(e)    The obvious solution to the problem of “free riding” is not the making of a [common fund order]. The equitable spreading of that cost is, in fact, better achieved by the making of a [funding equalisation order].

32    His Honour then stated (at [405]):

It is apparent from my brief discussion of the cases referred to at [400] above and my discussion of Beach J’s decision in Bellamy’s that the judges who decided those cases (Murphy, Beach and Lee JJ) are of the opinion that this Court has power to make a [common fund order] at the conclusion of a representative proceeding and should ordinarily do so, keeping a close eye, of course, upon the approved rate of commission and overall quantum of the particular funder’s remuneration. Their Honours are of the opinion that the judgments of the majority in Brewster did not go so far as to decide that this Court has no power to make a [common fund order] at any time. With great respect to my colleagues, I do not think that the position is so clear

33    Foster J concluded (at [421]) that the reasoning of the plurality in Brewster which led to the conclusion that this Court does not have power to make a common fund order at an early stage of a representative proceeding, “with its emphasis on the true construction of the relevant legislative provisions, probably forecloses resort to s 33V of the FCA Act…as an appropriate source of the power to make a [common fund order] at the conclusion of a representative proceeding…”

34    Foster J also drew attention to the separate judgment of Gordon J in Brewster, who agreed with the plurality of the High Court. Foster J stated (Audi at [363]):

The conclusion expressed by [Gordon J in Brewster] in the last sentence of 660 [135] is quite unequivocal: Having described the essence of a [common fund order], her Honour said that Courts do not have power to make such an order. Her Honour did not make any temporal qualification to that remark. In my view, her Honour intended to say that neither this Court nor the Supreme Court of NSW has the power to make a [common fund order] (as commonly understood) at any time.

35    In other cases, in light of the reasoning of various members of the High Court in Brewster, the Court has made a funding equalisation order at settlement in preference to a common fund order (see Vocus (Moshinksy J) at [8] and [68]-[77]; UGL (Anastassiou J) at [8]-[13]).

36    These authorities, in my view, establish a conflict such that there is an interest in having the question resolved by the Full Court. In this regard, determination of the Question will benefit not only the parties and group members in this proceeding but shall also provide greater certainty to parties and group members in other representative proceedings.

The Question is likely to have a material impact on settlement negotiations

37    7-Eleven submits that resolution of the Question will affect what the parties “can or cannot put down on the table” in any settlement negotiations (see Sackar J in Owen Brewster v BMW Australia Ltd [2020] NSWSC 1261 (‘BMW’) at [14]), including those which are to take place at the mediation in April 2021, and is likely to materially affect the prospect of reaching a settlement of the class action for a sum which may be considered fair and reasonable to group members (Submissions in Reply filed by 7-Eleven on 24 September 2020 at [3(5)] and [19]).

38    There is evidence before me that resolution of the Question will have a marked effect on the financial outcomes for the parties and group members in the event of settlement (affidavit of Nigel David Jones affirmed 7 August 2020 (‘Jones Affidavit’) at [9]-[10], annexure NDJ-114). Annexure NDJ-114 to Mr Jones’s affidavit illustrates three hypothetical settlement scenarios, including two scenarios with a Common Fund Order (and two alternative commission amounts) and one scenario with a funding equalisation order (with a further alternative commission amount).

39    I recognise that financial outcomes for parties and group members in the settlement of representative proceedings are not determined solely by the making of a common fund or funding equalisation order, and may be affected by other variables such as the size of commission and the number of members who have signed the funding agreement. However, in this proceeding, I accept that the making of a Common Fund Order is likely to have a material impact on financial outcomes for parties and group members. It follows that the Question is likely to have a material impact on the settlement negotiations, including those which are to take place as part of the mediation.

40    Galactic submits, with some force, that parties frequently go into a mediation with uncertainty about legal and factual matters and it is up to the parties to assess the risks associated with such uncertainties. Galactic submits that, if the Court were required to deal with each uncertain question that arose prior to mediation, then the Court “would be flooded with endless applications for judicial determinations” (Galactic Submissions at [9]). However, I am not persuaded that the Question cannot be distinguished from other more routine uncertainties that arise in the course of mediation. 7-Eleven’s submits, and I accept, that the Question is a “critical integer” to settlement negotiations in this proceeding (Jones Affidavit at [40; 7-Eleven Submissions at [22(2)]). Having regard to the cases referred to in paragraphs 30 to 35 above and the nature of representative proceedings more generally, I expect that the Question may be similarly critical to settlement negotiations in other representative proceedings.

41    In this regard, I note the recent decision of Sackar J in BMW. In BMW, Sackar J has referred to the NSW Court of Appeal the question of that Court’s power to make a common fund order upon settlement. There are considerable similarities between BMW and the present case.

42    In Sackar J’s reasons for making the referral to the NSW Court of Appeal, his Honour held:

[12]    In this case I think there is a fine balance. There is no doubt in my mind that any defendant in any class action, given the High Court’s decision in [Brewster] has a real interest in the question of whether there is in fact jurisdiction to make a common fund order. I am persuaded that Mr Scattini’s material does, to a very large extent, take away some of the basis upon which previously I thought a controversy, a real controversy, arose.

[13]    I am persuaded this morning that just by way of fine balance that [the plaintiffs’] material does not sufficiently in my mind take the issue off the table so as to remove in a practical sense a controversy between the parties…

[14]    I am acutely aware of nipping this issue in the bud as soon as can reasonably be done so that the parties know well in advance of March of next year what they can or cannot put on the table. To leave this matter until March of next year to see what might eventuate in the course of the mediation would be, in my view, entirely disruptive and although the present situation may cause this disruption and added expense of the parties, the disruption which would be caused if this issue arose for the very first time in March of next year may well have an impact on the possibility of the matter proceeding in May of next year.

43    I am similarly persuaded that it is desirable to resolve the Question prior to the upcoming mediation and “take the issue off the table” (BMW at [13]). As I have indicated, this may afford the parties greater certainty in preparing their respective bargaining positions for the mediation, and seek to avoid any disruption to the proceeding that might arise if the Question were raised for consideration by the Court at a later date.

The Question concerns a ‘matter’

44    I am satisfied that the Question is not hypothetical and is a question concerning a ‘matter’ for the purpose of s 25(6) of the FCA Act. The subject matter element of a ‘matter’ is clearly satisfied. I also consider that the justiciability element is satisfied for the following reasons.

45    First, it is clear that Galactic has an interest in applying for a Common Fund Order and has reserved its position to do so in future. Galactic submits that the circumstances in the present case ought to be distinguished from those in Edwards v Santos, where the defendants had already indicated their intention to apply to the Minister for a petroleum lease. The difference, Galactic submits, is that it has not indicated any intention to apply for a Common Fund Order (Galactic Submissions at [12]). However, while Galactic has not indicated its position and may have good reasons not to do so at this stage of the proceeding, it has expressly reserved its position to make such an application in the future, and has a commercial interest in doing so.

46    The circumstances before me are plainly different from a situation where a person has no interest in seeking a legal remedy or has informed the Court that it does not intend to seek such a remedy. In this instance, I am not persuaded that the Court ought to be constrained by Galactic’s decision not to show its hand. I am also wary that such a distinction may only serve to discourage parties and interested persons from being open and forthright with the Court as to their intentions for the future conduct of proceedings.

47    Second, notwithstanding any ambiguity in Galactic’s position, the significance of the Question to the proceeding is clear. As noted above, I accept that resolution of the Question will have a material impact on the respective bargaining positions of the parties in any settlement negotiations. I also accept that determination of the Question is of real commercial and practical importance to 7-Eleven and the further conduct of the proceeding. In this regard, the Question has “practical and real consequence”: NAB at [105].

48    Third, while it is unknown whether the proceeding will conclude by way of settlement or determination (see Galactic Submissions at [3]), I do not consider that this makes the Question hypothetical. I recognise that the proceeding may conclude by either means. I also recognise that, as the Question goes to the power of the Court to make a Common Fund Order both at settlement and determination of the proceeding— and each of the respective powers in ss 33V, 33Z and 33ZF of the FCA Act— part of the Question is directed at circumstances that will not eventuate. However, Mr Craig SC on behalf of 7-Eleven orally submitted that the Court’s power to make a Common Fund order at both settlement and at determination of the proceeding will inform the parties’ approach to settlement, and may affect whether or not the proceeding settles at all. In this sense, while only one outcome will eventuate, 7-Eleven has a real interest in knowing the correct legal position in relation to both potential outcomes.

49    In addition, I consider it would be unsatisfactory for the parties to have an answer to only part of the Question, and that such an outcome might only delay the disruptions to the proceeding that Sackar J cautioned against in BMW (at [14]).

50    Further, when submissions are filed, the Full Court may vary the Question to ensure that the controversy between the parties is fully determined.

Associate:

Dated:    14 October 2020