Federal Court of Australia

Williams v Toyota Motor Corporation Australia Limited [2021] FCA 1425

ORDERS

THE COURT ORDERS THAT:

1.    The separate questions identified by the order made on 8 October 2021 (as hereby varied in the terms set out below) be answered as follows:

(a)    Whether upon a proper construction of s 33Z of the Federal Court of Australia Act 1976 (Cth), at the conclusion of the initial trial, if the Court is satisfied that it is able to determine, on a common basis, that group members are entitled to an award of damages in respect of the heads of damage that are in issue at the initial trial, does the Court have power to make an award of damages for group members in respect of those heads of damage?

Answer: Yes.

(b)    If the answer to question 1 is “no”, should prayers 1.3 and 1.4 of the second further amended originating application be dismissed?

Answer: Does not arise.

2.    An order pursuant to s 33ZB of the Federal Court of Australia Act 1976 (Cth) that all group members who have not opted out are bound by Order 1.

3.    The respondent pay the costs of the applicants of the hearing of the separate questions.

4.    For the purposes of r 35.13(b) of the Federal Court Rules 2011 (Cth), the time by which any application for leave to appeal from these orders must be filed is fixed as being 28 days after the date the orders are made pursuant to s 33ZB of the Federal Court of Australia Act 1976 (Cth), following the delivery of judgment after the initial trial listed to commence on 29 November 2021.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

A    THE SEPARATE QUESTIONS

1    The applicants in this class action seek aggregate damages in respect of certain heads of damage on behalf of group members. The entitlement to aggregate damages is said to be a common question. From this, a novel issue arises: whether the Court has the power to award damages in an aggregate amount in respect of part (but not all) of the damages claimed on behalf of group members.

2    At an interlocutory hearing on 8 October 2021, I ordered that the following questions be determined separately and before any other issues in the proceeding:

(1)    Whether upon a proper construction of s 33Z of the Federal Court of Australia Act 1976 (Cth) (Act), the applicants are entitled, in their representative capacity, to maintain a claim for part of the damages suffered by some or all group members in this proceeding?

(2)    If the answer to question 1 is “no”, should prayer 1.3 of the second further amended originating application be dismissed?

3    Since the date of the orders proposing the separate questions, the only development that should be mentioned is that, pursuant to leave, the applicants have now filed a second further amended originating application (2FAOA) and a second further amended statement of claim (2FASOC). In prayers 1.3 and 1.4 of the 2FAOA, the applicants have set out, in detail, the orders that they would seek at the conclusion of the initial trial as to damages for group members (and the applicants). In light of those amendments in the 2FAOA, Question 2 was amended so as to apply to prayers 1.3 and 1.4 of the 2FAOA. I will return below to a reformulation of Question 1.

4    The separate questions were ordered for two reasons. First, consistent with the approach usually taken prior to the hearing of a large class action, the intention of the Court was to identify in advance of the initial trial: (a) all common questions of law and fact; (b) issues of commonality; and (c) any other issues, to be determined at that hearing. It followed that in undertaking this task of identification, the issue of what truly was a common question was brought into focus.

5    Secondly, the respondent (Toyota) has made an application to amend its defence. It is unnecessary for the purposes of these reasons to detail the nature of these amendments, save to remark that, following argument at the interlocutory hearing on 8 October 2021, I reached the view that there could be no conceivable prejudice occasioned to the applicants upon the amendment of the defence, unless the applicants needed to confront a newly pleaded aspect of the proposed amended defence at the initial trial. This would only be the case if the claim for aggregate damages was maintainable.

6    Even though aggregate damages may never be awarded in this case, I am satisfied that the answering of the separate questions in their current form is a proper exercise of judicial power (and the issue of power to do so was not put in any contest). The question of the proper construction of s 33Z of the Act is squarely in contention between the parties and the resolution of the questions has real utility. Apart from anything else, it will allow identification of common questions and also allow settlement discussions as to the resolution of the class action to proceed on a more secure footing as to potential legal entitlements at an initial trial: see Edwards v Santos Ltd [2011] HCA 8; (2011) 242 CLR 421 (at 436 [37] per Heydon J, with whom French CJ, Gummow, Crennan, Kiefel and Bell JJ agreed).

7    These reasons as to why the separate questions were ordered, and the pending commencement of the initial trial, inform the necessity for the separate questions to be determined with celerity. The carefully written submissions of the parties, and the fact that I have reached a clear view after hearing from the parties as to the appropriate answers, allow me to proceed to deliver reasons immediately.

B    THE CLAIMS OF THE APPLICANT AND GROUP MEMBERS

8    The applicants allege that between 1 October 2015 and 23 April 2020 (Relevant Period), 264,170 defective Toyota diesel vehicles were supplied to Australian consumers (Relevant Vehicles). Toyota was the manufacturer of the Relevant Vehicles for the purposes of the Australian Consumer Law in Sch 2 of the Competition and Consumer Act 2010 (Cth) (ACL). The group members are persons who acquired a Relevant Vehicle during the Relevant Period (and who otherwise meet the description of “Group Members” now pleaded in the 2FAOA).

9    In summary, the applicants contend:

(1)    the Relevant Vehicles failed to comply with the statutory guarantee as to acceptable quality in s 54 of the ACL;

(2)    Toyota made misleading representations and omissions about the Relevant Vehicles, in contravention of ss 18, 29 and 33 of the ACL; and

(3)    Toyota engaged in conduct in relation to the supply of the Relevant Vehicles that was, in all the circumstances, unconscionable, in contravention of s 21 of the ACL.

10    Relief is sought under Pt 5-4, Div 2 of the ACL, which provides for remedies relating to the guarantees (including an action for damages against manufacturers of goods), and Pt 5-2, Div 3 of the ACL, which provides for an action for damages (relevantly because of a contravention of the general protections in Ch 2 of the ACL).

11    More particularly, “damages” (to adopt the term used in the ACL for these forms of statutory compensation) are sought by the applicants for themselves and on behalf of group members pursuant to:

(1)    ACL s 272(1)(a), for “any reduction in the value of the [Relevant Vehicles], resulting from the failure to comply with the guarantee”, calculated pursuant to the statutory formula prescribed therein;

(2)    ACL s 272(1)(b), for “any loss or damage suffered by the [group member] because of the failure to comply with the guarantee … if it was reasonably foreseeable that the [group member] would suffer such loss or damage as a result of such a failure”;

(3)    ACL s 236, for loss and damage suffered “because of” Toyota’s conduct in contravention of ACL ss 18, 21, 29 and 33.

12    It should be noted that pursuant to s 272(3) of the ACL, damages recoverable under s 272(1)(b) do not include any damage suffered through the reduction in the value of the relevant goods (which is, of course, recoverable under s 272(1)(a)). Hence, the two heads of damage under s 272 are distinct and exclusive.

13    As noted above, the applicants assert that the question of the entitlement of group members to damages in respect of certain heads of damage can be determined on an aggregate basis and is a common issue to be determined at the initial trial. As refined today during oral argument, those relevant heads of damage of group members (Alleged Common Damages) are:

(1)    all of the s 272(1)(a) damages; and

(2)    part of the s 272(1)(b) damages (that is, damages in respect of GST payments made by group members in connexion with the supply of the Relevant Vehicles).

14    If such a course were to be licit, this would leave for subsequent determination part of every group member’s individual claim (Alleged Residual Monetary Relief) being:

(1)    the balance of the group member’s claim for s 272(1)(b) damages (for example, damages in respect of loss arising from the payment financing charges incurred or for income forgone on days when their vehicle was being serviced or repaired as a consequence of the alleged defect or for income forgone on days when their vehicle was being serviced or repaired as a consequence of the alleged defect: see 2FASOC, Schedule 2 at [5]);

(2)    any bespoke claim for damages under the ACL (currently pleaded at a high level of generality by the applicants in the particulars of loss in Schedule 2 to the 2FASOC); and

(3)    any other monetary remedy open to be advanced by the group member subsequent to the initial trial when, and if, it comes to a group member advancing their individual claim.

C    THE REAL ISSUE FOR DETERMINATION

15    As the applicants correctly point out, Question 1 asks whether or not the applicants are entitled, in their representative capacity, to “maintain a claim” for part of the damages suffered by some or all group members in this proceeding. Strictly speaking, this question does not arise as the applicants do maintain all of the claims for damages that have been pleaded in respect of group members. The real issue raised by Question 1 is whether the applicants are entitled to bifurcate group members’ claims for monetary relief by obtaining a separate award of aggregate damages in the amount of the Alleged Common Damages. Put another way, whether, at the conclusion of the initial trial, if the Court is satisfied that it is able to determine, on a common basis, that group members are entitled to an award of damages in respect of the Alleged Common Damages, does the Court have power to make a subsequent award of damages for group members in respect of their individualised Alleged Residual Monetary Relief?

16    Accordingly, Question 1 should be amended to reflect the true issue presented.

D    THREE KEY PROVISIONS

17    Prior to explaining why Toyota contends the course proposed by the applicants is misconceived, it is worth first setting out the key provisions of Pt IVA relevant to aggregate damages. First, s 33Z of the Act provides:

33Z Judgment—powers of the Court

(1)    The Court may, in determining a matter in a representative proceeding, do any one or more of the following:

(2)    In making an order for an award of damages, the Court must make provision for the payment or distribution of the money to the group members entitled.

(3)    Subject to section 33V, the Court is not to make an award of damages under paragraph (1)(f) unless a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment.

(4)    Where the Court has made an order for the award of damages, the Court may give such directions (if any) as it thinks just in relation to:

(Emphasis added).

18    The highlighted parts of this section will assume particular importance in the discussion below.

19    Secondly, there is what I described in Gill v Ethicon Sàrl (No 3) [2019] FCA 587; (2019) 369 ALR 175 (at 176 [4]) as the most important provision within Pt IVA, being s 33ZB, which is in the following terms:

33ZB Effect of judgment

A judgment given in a representative proceeding:

(a)    must describe or otherwise identify the group members who will be affected by it; and

(b)    binds all such persons other than any person who has opted out of the proceeding under section 33J.

20    The “statutory estoppel” arising upon the making of a s 33ZB order is the mechanism by which the non-party group members are bound by a “judgment” made in a class action.

21    This turns attention to the third provision to which reference should be made for present purposes, which defines what a “judgment” is for the purposes of the Act. Section 4 of the Act relevantly provides as follows:

judgment means:

(a)    a judgment, decree or order, whether final or interlocutory; or

(b)    a sentence;

and includes a conviction.

E    AN OUTLINE OF TOYOTA’S ARGUMENT

22    With some degree of overlap and without undue simplification, Toyota’s arguments can be placed into seven categories.

23    First, Toyota contends the applicants’ proposed approach leaves open the possibility that group members may, at a later stage, allege a different amount of loss to that computed by their present experts, that is, to have a “second bite of the cherry” and that, furthermore, Toyota will be forced to litigate the question of causation at least twice: once in respect of Alleged Common Damages; and once more as part of every group member’s individual claim for Alleged Residual Monetary Relief.

24    Secondly, s 33Z contemplates that a Court may “in determining a matter in a representative proceeding” give a “judgment”, make certain determinations, grant certain relief and make certain awards of damage. Any determination under s 33Z is in respect of a “matter” and here, the “matter” is the entire damages claim brought by the applicants in their representative capacity for the group members: see 2FAOA (under the heading “Details of claim”) and 2FASOC (schedules 2 and 3). This claim comprises 11 heads of damage, not just the three claimed on an aggregate basis.

25    Thirdly, as to s 33Z(1)(e), this provision provides that the damages that may be awarded are “damages consisting of specified amounts or amounts worked out in such manner as the Court specifies”; hence, the Court can prescribe a formula or methodology by which the quantum of the damages of group members, sub-group members or an individual group member is to be ascertained. Although this enables the Court to make an “aggregate assessment” of damages, s 33Z(1)(e) requires the determination of amounts for individual group members, either by the specification of an amount or by the provision of a means whereby an amount is to be ascertained. But an award of damages for each group member must be once and for all; that is, it must be in respect of all heads of damages rather than only part of them.

26    Fourthly, as to s 33Z(1)(f), the point that received the most emphasis in oral submissions regards the meaning of the word “aggregate”. To the extent aggregate damages have been considered in other cases, it has been in the context of the total entitlement of group members. Moreover, s 33Z(3) controls an award of aggregate damages and reference in that subsection to “the total amount to which group members will be entitled under the judgment” cannot be construed to mean “the total amount [for one head of damage pursuant to one cause of action] to which group members will be entitled under the judgment”. A contrary construction (such as advanced by the applicants) has two fundamental difficulties: (a) the ordinary meaning of the adjectives “aggregate” or “total” is that it constitutes or comprises the whole or the entire; and (b) any construction allowing for anything other than a “total” award implies words that are too much at variance with the language in fact used by the legislature, are not necessary to give effect to the purpose of the provision (including and in particular, when one considers the context of the provision), and are not necessary to avoid an absurd result or one that manifestly contradicts the apparent purpose of the provision.

27    Fifthly, s 33Z(2) provides that in making an order for an award of damages, the Court “must make provision for the payment or distribution of the money to the group members entitled”. Section 33ZA relevantly provides that, without limiting the operation of s 33Z(2), in making provision for the distribution of money to group members, the Court may provide for the constitution and administration of a fund consisting of the money to be distributed. If the Court were to make an award of damages under s 33Z(1)(e) or (f), it would likely make an order for the constitution of a fund and distribution of money under s 33ZA. If the award were only for part of the damages that may ultimately be awarded, “it is entirely unclear how the constitution and administration of the fund would operate”. Such practical considerations may play a role as a relevant contextual consideration, in construing a provision that is reasonably open to different meanings or interpretations, and s 33Z should not be construed in a way that may result in the procedure in s 33ZA being enlivened otherwise than intended.

28    Sixthly, if a determination is made for damages at an initial trial, it only becomes a judgment binding on group members by reason of s 33ZB (see [19] above); but such an order determines the entire justiciable controversy between the group member and Toyota, and the same group members cannot remain able to sue for Alleged Residual Monetary Relief. If group members wish to take a course other than that which is provided for by their representatives, they are entitled to opt out of the proceeding. There is a presumption that an award of damages under s 33Z is done on a once and for all basis and there is nothing in Pt IVA that supports a rebuttal of that presumption. Indeed, the fact that the determination of the “justiciable controversy” will be binding on all group members by reason of s 33ZB supports the construction of s 33Z consistently with the presumption.

29    Seventhly, Toyota relies on the related doctrines of res judicata and merger. Where an action has been brought and judgment has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. Further, merger treats a cause of action as extinguished once judgment has been given on it, and the claimant’s sole right becomes a right on the judgment.

F    CONSIDERATION

F.1    Some Fundamental Concepts

30    In assessing the strength of these contentions, it is appropriate to commence by paying attention to some fundamental aspects of how a class action operates. I have addressed this topic a number of times including, in some detail, in Dillon v RBS Group (Australia) Pty Ltd [2017] FCA 896; (2017) 252 FCR 150 (at 158–163 [42]–[60]), and in section G of my judgment in Dyczynski v Gibson [2020] FCAFC 120; (2020) 280 FCR 583 (at 661–666 [325]–[343]). I draw upon the observations made in those cases below.

31    It is unnecessary to go into the precise details, but the group members were defined on commencement of this class action as being persons who purchased the Relevant Vehicles in a particular way during the Relevant Period. Some of these persons have opted out, leaving the current crop of group members who are part of, but not party to, the class action. It may be a difficult task, but it would be theoretically possible to compile a list of those persons – there is sufficient certainty of composition.

32    Like the applicants, the group members had, at the time of commencement, a “claim” against Toyota (as that term is used in s 33C of the Act). The claim of each claimant is not the cause of action pleaded and has an existence independent of, and antecedent to, this class action. The claims, of course, are in respect of, or arise out of, similar or related circumstances and give rise to substantially common issues of law or fact, but this does not mean that each claimant has identical causes of action or entitlements to relief that could be maintained by that claimant in the group member’s individual case against Toyota.

33    Let us take some possible examples (which involve nothing more than speculation for the purposes of illustration). Group Member A, who thus far has played no active part in the class action (and indeed may not presently be aware of its existence), may have purchased his car (a Relevant Vehicle) but that car, for some reason, may be alleged to have some manufacturing problem particular to that car, which has nothing to do with the alleged defect pleaded by the applicants. Group Member B may also be ignorant about being a group member but is an environmental warrior with an acute interest in the removal of pollutant emissions from motor cars and, in purchasing his car, may have allegedly relied upon some express individualised representation made to him by a Toyota employee. They also may have suffered quite different types of loss (actionable under the ACL or at common law), the details of which are all currently unknown to the applicants and those who advise them. The individual claims and the individual causes of action of Group Member A and Group Member B may be different from one another (and from those of the applicants), but are sufficiently connected to form part of the grouped claims the subject of the class action. Incidentally, there is nothing problematical about the precise details of group members’ claims not being able to be ascertained at this time. The group member claims were pleaded in this class action at a level of generality sufficient to show compliance with s 33H of the Act, but a high-level pleading of those claims was not required just because this was a class action: see Dillon v RBS Group (at 160 [48]).

34    So how does Pt IVA deal with these potentially disparate, yet still sufficiently connected, claims?

35    Usually, but not invariably, the scheme of Pt IVA contemplates that the individualised claims of group members would occur after an initial trial of common issues. Following the determination of common issues at the initial trial, orders are made pursuant to s 33ZB.

36    As noted above, the “statutory estoppel” means the non-party group members are bound by the determination of common questions. The answer to the common questions might (but might not) determine the individual claims of group members. As by now should be obvious, this will depend upon the nature of the claim, and the nature of the answer. In the common circumstance where the answer to a common question or questions is not determinative, it will be necessary for the group members’ claims to be determined individually, usually following a “declassing” order. At this time, the dictates of procedural fairness will require the claim to be sufficiently pleaded or otherwise particularised.

37    But there can be departures from this norm. Let us assume the individual claim of Group Member A gives rise to a limitations issue not present in the individual claim of the applicants but that does affect a number of other group members – it might be thought useful for Group Member A to have his claim determined at the initial trial as a “sample” group member (or making Group Member A a “sub-group representative party” pursuant to an order made under s 33Q of the Act). In these circumstances, Group Member A would, of course, be required to plead out his claim and would participate in the initial trial as if he was a party.

38    Additionally, as a matter of theory, but not present in this class action, it might be that the Court considers it utile and consistent with the overarching purpose to separate out and determine before all other issues a common issue, which might be determinative of the claim of all or some group members. Individual group members would usually play no part in this hearing as the applicants (with the statutory authority to deal with the common aspects of group member claims) would engage with the respondent as to the resolution of this common issue. In this case, Pt IVA contains a protection: absent leave being granted to the contrary, such a separate determination of a final issue could not occur without giving the group members a right to opt out: s 33J(4). Hence, the “statutory estoppel” will only take effect if the group member has not opted out.

39    But the regime also provides sufficient flexibility if the Court decides not just to identify whether a group member has a claim, but to go further to determine that individual claim by resolving any relevant common issues and also issues bespoke to the group member. If the Court does so, as explained in Dyczynski (at 665–666 [341]–[242]), this amounts to a determination of the controversy between one actor (the group member) and another (the respondent). Because an applicant in a class action is not a privy in interest of the group members with respect to the group members’ individual claims, it is fundamental that such a controversy is not allowed to be determined without hearing from a non-party group member to the extent the controversy involves issues other than common issues. Hence, if, unusually, the claim of the group member is to be determined at trial and otherwise than by determination of purely common issues, it is necessary for orders to be made identifying that this step is occurring, that the group member has notice it is occurring and has the opportunity of adducing evidence and making submissions as to the merits of the claim.

40    At least three important points can be drawn from the Pt IVA regime in general and, in particular, from this survey of the way in which the Court can determine group member claims. The first is that the class action regime provided for in this Court by Pt IVA is procedurally unique; its evident purpose, after all, was to displace generally understood procedures. The second, connected to the first, is that care must be taken in transposing general law concepts as to rights and entitlements of parties and finality (developed in ordinary inter partes litigation) acontextually, and without adaption to class action procedures, which usually do bifurcate aspects of claims in dealing with the claims of non-parties. The third is the manifest flexibility of the scheme. In grouping and dealing with the claims of non-parties, wide powers are granted to the Court, and these powers should not be constrained by making implications or imposing limitations not found in the words used in Pt IVA.

F.2    Part IVA: Purpose and Relevant Legislative History

41    It is next useful to identify the purpose of the enactment of Pt IVA (which can be done briefly) and also track its legislative history in relevant respects.

42    The purpose is clear: to supplant (or, perhaps more accurately, given the survival of the Chancery procedure, to supplement) procedures initially developed in equity for representative proceedings but which were perceived to have limitations and uncertainties. Pt IVA was inserted into the Act by the Federal Court of Australia Amendment Act 1991 (Cth). As was noted by Kiefel CJ, Bell and Keane JJ in BMW Australia Ltd v Brewster [2019] HCA 45; (2019) 269 CLR 574 (at 611 [82]) the objective of the amendments:

…were two-fold: first, to enhance access to justice for claimants by allowing for the collectivisation of claims that might not be economically viable as individual claims; and secondly, to increase the efficiency of the administration of justice by allowing a common binding decision to be made in one proceeding rather than multiple suits. Part IVA of the FCA … pursued these objectives through the regime for representative proceedings tailored to address these defects in the law.

(Citations omitted).

43    The Explanatory Memorandum relevantly stated (Explanatory Memorandum, Federal Court of Australia Amendment Bill 1991 (Cth) at [4]):

The new representative action procedure was developed following the report of the Australian Law Reform Commission entitled ‘Grouped Proceedings in the Federal Court’, which was tabled in Federal Parliament in December 1988.

44    Similarly, the second reading speech noted that the procedure contained in the amendment Bill had been developed following the Australian Law Reform Commission, Grouped Proceedings in the Federal Court (Report No 46, 14 December 1988) (Report): Commonwealth, Parliamentary Debates, House of Representatives, 14 November 1991, 3174 (Michael Duffy, Attorney-General).

45    Appendix A to the Report included a draft bill titled “Federal Court (Grouped Proceedings) Bill 1988”, which included the following:

(1)    Clause 30(2): “The Court may, in respect of 2 or more of those proceedings, order the respondent to pay an aggregate amount without specifying the amount payable in respect of each proceeding”; and

(2)    Clause 30(3): “The Court must be satisfied that the aggregate amount is a reasonably accurate assessment of the total amount of the money payable as relief in those proceedings”.

46    The Report explained (at pp 95–96):

Recommendations: aggregate assessment where appropriate. Aggregate assessment could reduce both the costs to the parties and the costs involved in the administration of justice. One assessment of monetary relief will, generally speaking, be a more efficient and cheaper means of giving judgment than many separate assessments, particularly in cases where there are relatively small claims which would not justify the cost of individual proof. In addition, monetary relief might be received by applicants more quickly than otherwise. An aggregate assessment benefits respondents by assessing their liability once and for all in relation to all group members covered. After an aggregate assessment has been made and the amount paid, the respondent’s liability to that group will have been completely and finally determined. It will have no further obligations in relation to the group members’ proceedings. But it will not always be possible to make an aggregate assessment. It may be difficult to estimate the number of group members or the extent of damage of each. This could result in a respondent paying more than the total loss that would have been capable of proof in individual claims. Alternatively, the number of group members or the amount of their loss may be underestimated. As a result, some may receive no relief, as the judgment will bring to an end the liability of the respondent. For these reasons, aggregate assessment will not always be the most appropriate answer and may not be in the interests of group members. It is necessary to define clearly the circumstances where it can be used and to make provision for cases where the amount has been overestimated or where not all group members come forward to claim.

(Emphasis added).

47    This is consistent with the explanatory memorandum attached to the Report (at p 180), where the following was noted:

Clause 30 – Aggregate assessment of monetary relief

Clauses 30 applies to grouped proceedings where monetary relief (except for costs alone) is claimed. It allows the Court to make a global award covering all the group members described or identified in the award, rather than making individual awards of monetary relief in each group member’s proceeding.

Subclauses 30(1) and (2) allow the Court to make such a global award. Under subclause 30(3), the Court must be satisfied that the aggregate amount is a reasonably accurate assessment of the total of the money payable as relief in the group members’ proceedings covered by the award.

(Emphasis added).

48    Undoubtedly, the thrust of the Report supports the notion that any award of aggregate damages would be a “global” or a “once and for all” award.

49    However, as can be seen from [17] and [45] above, when enacted, s 33Z had differences to clause 30 as proposed in the Report. Unlike clause 30(2), s 33Z(1)(f) does not refer to amounts payable “in respect of … proceedings”; and unlike clause 30(3), which refers to “the total of the money payable as relief in those proceedings”, s 33Z(3) refers to the “total amount to which group members will be entitled under the judgment”. The enactment of this provision must be understood against the background that “judgment” (like the different concept of “proceeding”) was a defined term in the Act: see s 4.

50    The Report is important in understanding the background to, and motivation for, the enactment of Pt IVA. It is often useful in divining the intention behind particular provisions, which remained constant between the draft bill proposed by the Report and the ultimate legislative text in Pt IVA. But sometimes it needs to be approached with care. As Wilcox J observed in Nixon v Philip Morris (Australia) Ltd [1999] FCA 1107; (1999) 95 FCR 453 (at 484 [116]), in the context of an argument that s 33Z contained implied confinement of the scope of the damages available under the class action procedure:

Bearing in mind that, in drafting the Bill eventually presented to Parliament, the Government departed from the Commission’s model in several important respects, it is a large assumption to ascribe to the Government all the Commission’s views.

51    In relation to the “[n]ew section 33Z” in the amending Bill, the Explanatory Memorandum circulated by the then Attorney-General, the Hon Michael Duffy MP, explained (at [38]–[39]):

In awarding damages, the Court is given a wide discretion as to the nature of the order it may make to fit the circumstances of the particular case before it. For example, it may wish to make an award consisting of amounts determined by reference to a mathematical formula or by reference to records of the respondent. The Court is also specifically empowered to award damages in an aggregate amount without specifying amounts awarded in respect of individual group members. Except where it is approving a settlement, the Court may not make an aggregate award unless a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment.

Where the Court awards damages it may specify the way in which a group member is to establish an entitlement to damages and the means by which any disputes about entitlement are to be determined.

(Emphasis added).

F.3    Construction of Section 33Z

52    It is worth approaching the construction by dealing initially with each of the bolded parts of the text: see [17] above.

I    The Chapeau

53    As to the words that the powers in s 33Z are exercisable by the Court “in determining a matter in a representative proceeding”, Toyota contends that “in determining a matter in a representative proceeding” the Court gives a “judgment”, and any determination under s 33Z is in respect of a “matter” (in this case is the entire damages claim brought by the applicants in their representative capacity for the group members). In effect, this argument, which was not pressed to the same extent orally, is that the powers in s 33Z(1) may only be exercised where the effect of the exercise of the powers will be to resolve, on a final basis, the whole of the justiciable controversy that is the subject of the representative proceeding.

54    With respect, to the extent this argument is still pressed, it cannot be right.

55    The word “matter” or its plural form is used commonly in the Act: see, e.g., s 20 (exercise of original jurisdiction); s 20A (power of Court to deal with civil matters without an oral hearing); s 22 (determination of a matter completely and finally); s 23CC (matters that must be raised in pre-trial hearings in indictable offence proceedings); s 30BH (matters relevant to form of judgment on appeal); ss 26 and 30CA (which deal with cases stated and questions reserved); s 32 (jurisdiction in associated matters); s 32AA (proceedings not to be instituted in the Court if an associated matter is before the Federal Circuit and Family Court of Australia (Division 2)); s 32AB (discretionary transfer of civil proceedings to the Federal Circuit and Family Court of Australia); s 58BB (matters to be included in an infringement notice as to a jury offence); and s 58HA (which deals with admissibility of certain matters). It is not a defined term and, as the above provisions make clear, it is often used in the Act in the same way as it is used in ss 76 and 77 of the Constitution; however, this is often not the case when it is sometimes used as a synonym for “proceedings” or takes on a more general meaning. It is used in the chapeau of s 33Z in the same way as if the word used was “issue”.

56    But in any event, what is clear is that the Court is not necessarily resolving an entire “matter” (as that word is used in its Constitutional sense) by exercising a power under s 33Z. In Nixon v Philip Morris (Australia) Ltd, Wilcox J held (at 484 [52]) that Pt IVA provides a mechanism for determining, in the one proceeding, individual claims each of which must be a “matter” within the meaning of ss 76 and 77 of the Constitution. For my own part, and with respect to his Honour, I do not think it is necessary to say each claim is a “matter”, provided the claim forms part of a “matter” within the jurisdiction of the Court. It is trite that the “matter” is the justiciable controversy between the actors to it comprised of the substratum of facts and claims representing or amounting to the dispute or controversy between or among them. Further, it is not the cause of action or the causes of action brought by the applicant and, like a “claim”, it is identifiable independently of the proceeding or proceedings brought for its determination. Importantly, given the undemanding threshold for the grouping of claims, the individual claims of group members, as a matter of impression and of practical judgment, may be essentially identical or be very different (subject to one substantial connecting factor of fact or law that allows them to be grouped). It is possible to have claims grouped in a class action which, except as to one issue of fact or law, might be regarded as being sufficiently “distinct and unrelated” so they are not part of the same Constitutional matter: see Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 (at 482 per Stephen, Mason, Aickin and Wilson JJ). Some may arise solely out of the same substratum of facts, but others may not. It all depends.

57    To assert in an a priori way that each claim in a class action must be an individual “matter”, or that all of the claims as grouped in the class action must all be part of the one “matter”, is to pay insufficient recognition to the different extents of commonality that can exist in (and within) claims grouped in a Pt IVA proceeding. All that is necessary is that the claims be in a “matter” within the subject matter jurisdiction of the Court. Nothing I said in Dyczynski v Gibson (at 670–671 [366]) should be read as suggesting anything to the contrary.

58    Returning to the text, it is tolerably clear that the term “matter” is used in s 33Z(1) to refer to the Court being given certain powers in quelling a justiciable issue relating to a claim or claims. Those claims are the “claims” to which the gateway provision of s 33C refers (the “claims” of the applicants and group members which have certain aspects of commonality that allow them to be grouped in the class action).

59    But these words in s 33Z(1) cannot sensibly be read as suggesting that the powers of the Court “in determining a matter in a representative proceeding” can only be exercised in a way that resolves finally all issues in controversy. It is very easy to conceive of cases where parts of the one “matter” (for example third party claims for indemnity or contribution), would not be before the Court in resolving issues at an initial trial, or even in resolving an individual claim within a class action.

60    I have already explained the flexibility with which Pt IVA allows a group member’s individual claim to be resolved. Where s 33Z contemplates that a Court may “in determining a matter in a representative proceeding” give a “judgment”, make certain determinations, grant certain relief and make certain awards of damage, it is clear from the text and context that such judicial actions may be directed to particular issues that arise in respect of a claim or claims. Subsections (a) and (b) of s 33Z(1) provide the explicit source of power to determine common issues of law or fact. It is manifest that such a process of “determining a matter” may leave other issues that are wholly or partly unresolved and will need to be determined by one or more of the processes available under Pt IVA. This is apparent in, for example, s 33Q(1) which contemplates that there may be a “determination of the issue or issues common to all group members”, but that this will not “finally determine the claims of all group members”, in which case the Court may give “directions in relation to the determination of the remaining issues”.

61    The words in the chapeau are not words of limitation. A judgment of the Court is in respect of the issues resolved at a particular time, including at an initial trial (recalling that “judgment” is defined to mean “a judgment, decree or order, whether final or interlocutory”). Any judgment, however, will only be as to the claims that are the subject of the class action. Consistent with the statutory scheme, it cannot be that the Court must reach a single comprehensive judgment that is apt to resolve all issues in a class action (in this case said to be “the entire damages claim brought by the [a]pplicants in their representative capacity for the [g]roup [m]embers”: see the Toyota written submissions (TS) at [24]–[25]). If s 33Z was only engaged in resolving the whole controversy and encompassing all claims, the scheme would not work. For example:

(1)    the powers in s 33Z(1)—including the power to “determine an issue of law” or “determine an issue of fact” in s 33Z(1)(a) and (b)—would not be exercisable at initial trial unless the initial trial determined all claims of all group members;

(2)    the Court would lack the power to determine common issues of law and fact ahead of individual issues of law and fact, and would be compelled to determine all disputed issues of law and fact comprising the “justiciable controversy” at once;

(3)    the Court would lack the power to determine the claims of some group members ahead of others, or the claims of some sub-group members ahead of other sub-group members—all of which claims arise out of the one same “matter” and form part of the single justiciable controversy before the Court (TS [24]); and

(4)    the Court would lack the power to determine issues of liability without also determining all related issues of damages.

62    The width of the power is reinforced when one has regard to the other parts of the section.

II    Section 33Z(1)(e)

63    As is evident from the text, s 33Z(1)(e) confers a general power upon the Court to “make an award of damages”.

64    The first question that seems to arise is what does “damages” mean in this context (and in the context of s 33(1)(f)). There is authority for the proposition (see [50] above) that it is not limited to compensatory damages (including, presumably, aggravated compensatory damages) and can extend to exemplary damages, that is, damages, where available, awarded in addition to compensatory damages. There was no suggestion advanced before me that it cannot extend to statutory compensation for loss and damage. Statutory compensation, labelled in the ACL as “damages”, is sought here, but this is not a case where the applicant seeks any damages at common law on an aggregate basis. It seems to me the Legislative intention was, at the least, to extend the circumstances where aggregate damages could be awarded to amounts payable in compensation for damage suffered, being a court-awarded sum of money which aims to place the claimant in the position the claimant would have been in had the relevant legal wrong not occurred.

65    How much further the sections speaking of “damages” go might be thought to be open to real debate. It would bespeak confusion of thought for someone to describe a compensatory award in Equity’s exclusive jurisdiction as “damages”: see Pascoe (Liquidator), in the matter of Matrix Group Ltd (in liq) (Trustee) (No 2) [2021] FCA 426 (at [13] per Lee J). But it is orthodox to speak of an award under Lord Cairns’ Act 1858 (UK) (21 & 22 Vict c 27), in Equity’s auxiliary jurisdiction, as damages. It is unnecessary for present purposes to consider the interesting questions that may arise in relation to what might be described as non-proprietary equitable remedies (and s 33Z(1)(d) which refers to equitable relief) and the provisions with which we are presently concerned.

66    What is clear from the text of s 33Z(1)(e) is that it delineates the class of persons “for” whom an award of damages may be made (“group members, sub-group members or individual group members”); the initial reference to “group members” must mean group members as a whole as distinct from “individual group members” which necessarily must mean damages may be made to the whole of the class, part of the class, or individuals within the class. Further, it provides that the damages that may be awarded are “damages consisting of specified amounts or amounts worked out in such manner as the Court specifies”; hence, the Court can prescribe a formula or methodology by which the quantum of the damages of group members, sub-group members or an individual group member is to be ascertained.

67    This is consistent with the notion of allowing the Court to make an “aggregate assessment” of damages, in the sense of awarding damages without requiring a subsequent process involving individualised evidence of loss from the class of persons to whom the award is directed. In contrast to an award of damages “in an aggregate amount” pursuant to s 33Z(1)(f), the quantum of the damages which results from the application of a “formula” based award under s 33Z(1)(e) may not be known until the formula has been applied to the claims of all group members in whose favour the award is made. Relatedly, s 33ZA empowers the Court, in making provision for the distribution of money to group members, to constitute a fund consisting of the money to be distributed to group members (s 33ZA(1)(a)) and to require the respondent to make payments into the fund, including in instalments, on such terms as the Court directs to meet the claims of group members (s 33ZA(1)(b)). Any money remaining in the fund after all necessary distributions to group members have been made can be returned to the respondent: s 33ZA(5).

68    Section 33Z(2) requires that “in making an order for an award of damages” (which would cover an award of damages under either subs 33Z(1)(e) or (f)) the Court “must make provision for the payment or distribution of the money to the group members entitled”. Subsection (4) then provides that the Court may give such directions as it thinks just in relation to the manner in which a group member is to establish any “entitlement to a share in the damages” (s 33Z(4)(a)) and the manner in which any dispute “regarding the entitlement of a group member to share in the damages” is to be determined. These subsections indicate that while an award of damages will be predicated upon the Court’s determination of the relevant issues justifying such an award for group members, there may be residual processes required to deal with individual group members establishing their entitlement to a share in such damages.

69    There is nothing in the text (or context) of s 33Z(1)(e) that limits or confines the manner in which the power to award damages is to be exercised. Notably, whatever may be the proper construction of s 33Z(3) (discussed further below), that provision does not apply to the making of an award of damages under s 33Z(1)(e). Although s 33Z(1)(e) is broader than s 33Z(1)(f), to the extent it is relied upon to support something which satisfies the description of aggregate damages, it is difficult to see why it would be an appropriate exercise of judicial power to make such an award if the Court could not make a reasonably accurate assessment of what it was awarding. It is unnecessary for present purposes to consider other circumstances which might engage s 33Z(1)(e).

III    Sections 33Z(1)(f) and 33Z(3)

70    Section 33Z(1)(f) confers power on the Court to “award damages in an aggregate amount without specifying amounts awarded in respect of individual group members”. However, it involves an important limitation: the Court must not make an award of damages under this provision “unless a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment”. It is not appropriate that I set out in this judgment my views as to the practical operation of s 33Z(3) except to the extent necessary. I will restrict myself to three comments (the first two of which are less significant for present purposes than the third).

71    First, understanding precisely what is meant by a “reasonably accurate assessment” is not without difficulty, as is illustrated by the differing approaches of O’Loughlin J in Australian Competition and Consumer Commission v Golden Sphere International Inc (1998) 83 FCR 424 and Victorian Court of Appeal in Schutt Flying Academy (Australia) Pty Ltd v Mobil Oil Australia Ltd [2000] VSCA 103; (2000) 1 VR 545; see also Mobil Oil Australia Pty Ltd v Victoria [2002] HCA 27; (2002) 211 CLR 1 (at 72–73 [169] per Callinan J). Secondly, given that s 33Z(1)(f) contemplates aggregate damages can be made in relation to statutory compensation (which was not in dispute before me), whatever s 33Z(3) does mean, it seems to me the provision could not be construed as somehow modifying the approach to causation as reflected in the statute allowing the award of statutory compensation.

72    The third matter is the textual indication within s 33Z(3) to “the total amount to which group members will be entitled under the judgment” (emphasis added) and whether this creates, as Toyota submits, an implicit limitation to the effect that there must be a judgment which deals with all the damages to which group members are entitled.

73    Although I was initially attracted to this argument, on close analysis, it does not have substance. In the context of s 33Z(3), the term “the judgment” means the judgment given by the Court in determining particular issues, and “the total amount” depends entirely on the nature and scope of the relevant judgment. Because there can be multiple judgments in the course of the Court’s management of a class action, there is no basis to construe the “total amount” as being the same as the total amount to which group members will be entitled in the proceeding or in the class action.

74    A judgment delivered at the conclusion of an initial trial that determines on a common basis some of the claims brought on behalf of group members but not others, and establishes that there is an entitlement to an award of damages to group members in respect of a head of damage that is determined on a common basis, would be a judgment of the kind described in s 33Z(1)(f) if the award of damages takes the form of an aggregate amount without specifying amounts awarded in respect of individual group members. It is of no significance that there may also remain unresolved issues, including in respect of a potential entitlement to a further award of damages in respect of an entitlement not established under that judgment.

IV    Generally

75    This approach to the construction of the s 33Z outlined above is consistent with the reality that the powers to award damages (ss 33Z(1)(e) and (f)) are broad and flexible powers. It is also consistent with the flexibility provided by Pt IVA in dealing with group members’ claims generally. Part IVA is not to be read by making implications or imposing limitations not found in the words used: Wong v Silkfield Pty Ltd [1999] HCA 48; (1999) 199 CLR 255 (at 260–261 [11] per Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ).

76    There is nothing in the text, context or purpose of s 33Z that suggests that the power to award damages is only exercisable where the damages the subject of the award reflect all of the monetary relief to which group members are, will or may be entitled in relation to their “claim”.

77    Leaving aside questions of discretion as to whether it would be an appropriate course, it is open, as a matter of power, to order that an aspect of the claim, including an aspect of group members’ damages claim, be determined at an initial trial, thereby deferring for later consideration other aspects of the claim for damages.

F.4    A Further Response to Toyota’s Contentions

78    The previous section is sufficient to deal with most of Toyota’s arguments as outlined in Section E above, but the following additional points should be made as to what I labelled its first, fourth, fifth, sixth and seventh arguments.

79    There is no “second bite at the cherry” contemplated or available, even if the Court was persuaded an order for aggregate damages was available and appropriate for the Alleged Common Damages. Section 33ZB orders would bind the group members to any common issue determined relevant to any award of aggregate damages at the initial trial. No such common issue could be re-litigated when it comes to the Alleged Residual Monetary Relief, as such a course would be prevented by the “statutory estoppel” (even if the class action was “declassed”).

80    At the risk of repetition, the use of the words “total” and “aggregate” cannot be separated from the balance of s 33(3); the accurate assessment must be of the total amount under a particular judgment. This will be the total amount of the award referable to the issues, that is, the heads of damages, determined by that judgment.

81    It may be accepted that if the Court were to make an award of aggregate damages it might make an order for the constitution of a fund and distribution of money under s 33ZA. But if the award was only for part of the damages that may ultimately be recoverable, I do not understand how insuperable difficulties would be occasioned in the constitution and administration of the fund. Funds comprising distinct funds are not unknown in the context of administering s 33V settlements (for example, a fund might be created when a settlement occurs against one respondent and not another), and serial distributions to group members are not uncommon. If the problems were significant, such practical considerations might be relevant to the exercise of discretion, but they do not go to power.

82    Any so-called rule that an award of damages is done on a once and for all basis must be seen in its proper context. Damages are awarded “once and for all” in the sense a Court does not order a respondent to make periodic payments to an applicant, including for loss that might be suffered following judgment, or to frame an award of damages in an amount contingent upon the occurrence of some future event: see, e.g., Gill v Ethicon Sàrl (No 5) [2019] FCA 1905 (at [4874] per Katzmann J). But leaving aside the limitation of applying common law analogies, as discussed above, and the flexibility of Pt IVA, no relief sought here involves an award of damages or compensation in an amount contingent upon the occurrence of some future event, including the suffering of any future losses, or periodic payments. As the applicants correctly submit, the principle called in aid by Toyota says nothing about the present question.

83    Finally, as to the related doctrines of res judicata and merger, this also adds nothing to the analysis. It may be accepted that: (a) when judgment has been entered in an action, no other proceeding can thereafter be maintained on the same cause of action; and (b) a cause of action is generally extinguished once merged in a judgment. However, this is not to the point. Toyota’s submissions suggest that the course proposed would be analogous to allowing a claimant to “bring a second action on the same cause of action, for example to recover further damages”. Yet, the course proposed by the applicants would facilitate the resolution of all claims for damages made on behalf of group members in the extant class action (or a declassed proceeding based on the same claim), but which had only been partly resolved consistent with the flexibility inherent in Pt IVA.

84    When it comes to the extinguishment of causes of action, there are judgments and there are judgments. It depends upon the terms of the judgment (as that term is defined in s 4 of the Act). For example, s 31A of the Act provides that the Court “may give judgment for one party against another in relation to the whole or any part of a proceeding”. Rules 26.01(1) and (5) of the Federal Court Rules 2011 (Cth) contemplate a judgment being given by an applicant against a respondent for part of an applicant’s claim. To speak of merger in the current context is as inapposite as speaking of the doctrine in the context of summary judgment entered on part of an applicant’s claim. Neither type of judgments necessarily dispose of the entirety of the claim.

G    CONCLUSION AND ORDERS

85    As is no doubt already evident, the above analysis was restricted to answering the reformulated separate questions. Those questions should be answered as set out in the orders above.

86    None of the above analysis means that even if liability was able to be established by the applicants at the initial trial on the common questions, that the applicants would be able to obtain an award of aggregate damages on behalf of group members.

87    To assist in ensuring that there is no unnecessary bifurcation caused by an interlocutory appeal, I propose to extend time for leave to appeal from the orders answering the separate questions until the time of expiry of any appeal period from any s 33ZB orders I make at the conclusion of the initial trial.

88    Even though Toyota may well be successful in resisting any award of aggregate damages, this legal argument as to power was discrete, and was a course embraced by Toyota as being appropriate when proposed. Costs of the separate question should follow the event. It should also be made plain that the answers to the separate questions are binding on the non-party group members who have not opted out.

Associate:

Dated:    17 November 2021