FEDERAL COURT OF AUSTRALIA

Impiombato v BHP Group Limited (No 5) [2024] FCA 591

ORDERS

THE COURT ORDERS THAT:

1.    The Applicants have leave to file an amended consolidated originating application and an amended consolidated statement of claim in substantially the form of the draft documents annexed to the affidavit of Cameron Peter Myers dated 5 December 2023.

2.    The amended consolidated originating application and further amended consolidated statement of claim take effect on and from 31 May 2018.

3.    By 20 June 2024, each party file any written submissions (no more than three pages) on the question of the costs of and incidental to the interlocutory application, and costs thrown away. The Court will determine the issue of costs on the papers.

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

REASONS FOR JUDGMENT

MURPHY J:

INTRODUCTION

1    This proceeding is a securities class action by the applicants, Mr Vince Impiombato and Klemweb Nominees Pty Ltd (as trustee for the Klemweb Superannuation Fund), brought on their own behalf and on behalf of the group members, against the respondent, BHP Group Limited (BHP). The applicants allege that BHP breached its continuous disclosure obligations under s 674 of the Corporations Act 2001 (Cth) (Corporations Act), and/or engaged in misleading or deceptive conduct in contravention of s 1041H of the Corporations Act and s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) by failing to immediately disclose to the ASX the material risk that the Fundão tailings dam at the Germano mine in Brazil (which is 50% owned by a BHP subsidiary) would collapse and BHP would thereby suffer significant financial losses. The Fundão Dam in fact collapsed on 5 November 2015 leading to a significant decline in BHP’s share price.

2    These reasons concern the applicants’ interlocutory application dated 5 December 2023 seeking leave to amend the group definition and the loss and causation plea in the current pleadings, the Consolidated Originating Application (COA) and the Amended Consolidated Statement of Claim (ACSOC), and for the amendments to relate back to the commencement of the proceeding.

3    The group definition appears in both the originating application and the statement of claim. The group definition in the COA provides:

The Group Members to whom this proceeding relates are all persons who or which:

1.    during the Relevant Period entered into a contract (whether themselves or by an agent or trustee) to acquire an interest in:

(a)    BHP ASX Shares; and/or

(b)    BHP LSE Shares; and/or

(c)    BHP JSE Shares;

2.    are not within the classes of excluded persons referred to in paragraph 3(b) of the consolidated statement of claim; and

3.    are alleged to have suffered loss or damage by, or which resulted from, the conduct of BHP Ltd as pleaded in the consolidated statement of claim.

The COA states that capitalised terms in that document have the same meaning as in the ACSOC.

4    The group definition in the ACSOC is worded differently but is to the same effect. It relevantly provides:

The Joint Applicants and the persons they represent (the Group Members), are all persons who or which:

(a)    during the period from 8 August 2012 to the close of trade on 9 November 2015 (Relevant Period) entered into a contract (whether themselves or by an agent or trustee) to acquire an interest in fully paid up ordinary shares in shares in:

(i)    the Respondent, formerly BHP Billiton Limited (BHP Ltd), on the Australian Securities Change (ASX), a financial market operated by the Australian Change ASX Limited (the BHP ASX Shares);

(ii)    BHP Group plc, formerly BHP Billiton Limited (BHP Plc), a company registered in England and Wales, on the London Stock Change (LSE), a financial market operated by the London Stock Exchange Group Plc (the BHP LSE Shares); and/or

(iii)    BHP Plc on the Johannesburg Stock Exchange (JSE), a financial market operated by the Johannesburg Stock Exchange Ltd (the BHP JSE Shares);

(b)    …

; and

(c)    are alleged to have suffered loss or damage by, or which resulted from, the conduct of BHP Ltd as pleaded in this statement of claim.

5    The applicants bring the application to amend the group definition against the backdrop that Moshinsky J delivered judgment in Impiombato v BHP Group Ltd (No 4) [2023] FCA 1354 (Impiombato No 4) on 3 November 2023. His Honour held (at [30]) that the group definition in the COA and ACSOC covers persons who, during the Relevant Period, entered into a contract to acquire an interest in:

(a)    fully paid up ordinary shares in BHP Ltd through trading on the ASX; and/or

(b)    fully paid up ordinary shares in BHP Plc through trading on the LSE or JSE.

6    That construction of the group definition means that the class does not include persons who acquired shares in BHP Ltd or BHP Plc (BHP Shares) during the Relevant Period through trading only on a ‘secondary’ share trading platform (being a trading platform other than the ASX, LSE or JSE, such as, for example, Chi-X Australia or BATS Chi-X Europe). The applicants describe persons who acquired BHP Shares in the Relevant Period, but who fall outside the group definition, as “Excluded Shareholders”. Strictly speaking, that description is inaccurate as they are not actually “excluded”. They are not and never have been group members. However, so as to avoid confusion, I have adopted the same description.

7    The applicants propose two types of amendment. The first, which lies at the centre of the dispute, are amendments to the group definition in the COA and ACSOC so that it includes all persons who, during the Relevant Period, acquired an interest in BHP Shares irrespective of the trading platform upon which they did so (Group Definition Amendments). The applicants also seek that those amendments take effect from 31 May 2018, being the date of commencement of the proceeding.

8    The applicants contend that leave should be granted for the Group Definition Amendments to relate back to the commencement of the proceeding because the amendments are to correct a lawyers’ drafting error in the group definition, so as to reflect the applicants’ intention when the proceeding was commenced. They submit that the Excluded Shareholders and existing group members will suffer substantial prejudice if leave is not granted and that allowing the amendments to relate back to the commencement of the proceeding is appropriate in the interests of justice in the proceeding.

9    BHP’s opposition to the Group Definition Amendments is not to the amendments per se, but to allowing the amendments to relate back to the commencement the proceeding. It offered to consent to the amendments on the condition that either they apply from the date the amendment is made, or the question of the date from when the amendments are to be effective is determined at trial.

10    BHP says that the evidence adduced to establish that the pleading of the group definition is a lawyers’ drafting error is insufficient and, amongst other things, it relies upon Ethicon Sàrl v Gill [2018] FCAFC 137; 264 FCR 394 at [47]-[52] (Allsop CJ, Murphy and Lee JJ). In that decision the Full Court explained the importance of certainty in relation to group membership and said that the “default position” is that amendments to a group definition should take effect from the date of the amendment. BHP contends that granting leave for the Group Definition Amendments to relate back to the commencement of the proceeding would be contrary to authority and will prejudice BHP by expanding the class, materially increasing BHP’s potential aggregate liability in the proceeding, by introducing claims which would otherwise be statute-barred.

11    The second type of amendments the applicants seek are to the loss and causation pleading in the ACSOC (Loss Amendments) and for those amendments to relate back to the commencement the proceeding. If these amendments are made, the proceeding will also allege causally-related loss by:

(a)    persons who are presently group members (through the acquisition of BHP Shares by trading on the ASX, LSE or JSE during the Relevant Period) but also in relation to BHP Shares acquired during the Relevant Period through trading on a secondary platform or exchange; and

(b)    if leave is granted for the Group Definition Amendments, persons who become group members as a result of those amendments.

12    The applicants contend that the Loss Amendments arise squarely out of the same or substantially the same facts as the claims by existing group members, and the relation back of these amendments to the commencement of the proceeding accords with the express prescription in r 16.53 of the Federal Court Rules 2011 (Cth) (the Rules), and should be uncontentious.

13    Again, BHP does not oppose the Loss Amendments per se; its opposition is to the amendments relating back to the commencement the proceeding. It argues that to permit those amendments to relate back will cause the same prejudice to BHP as arises in respect of the Group Definition Amendments.

14    The Court has power to make the orders the applicants seek, there is no opposition to the form of the amendments, and BHP’s opposition is to the amendments relating back to the commencement of the proceeding. For the reasons I explain, in the particular circumstances of the case, I consider it to be appropriate in the interests of justice in the proceeding to grant leave for the proposed amendments and for the amendments to take effect from the commencement of the proceeding.

THE EVIDENCE

15    The applicants rely upon the following affidavits and their annexures:

(a)    three affidavits of Mr Cameron Myers, a principal lawyer with Phi Finney McDonald (PFM), one of the two firms of solicitors for the joint applicants, sworn 5 December 2023, 26 February 2024 and 29 February 2024 (first, second and third Myers’ affidavits). The annexures to Mr Myers’ affidavits include the following affidavits filed in the proceeding:

(i)    an affidavit of Mr Timothy Finney, a partner of PFM, affirmed 13 July 2018;

(ii)    an affidavit of Mr Benjamin Phi, a partner of PFM, affirmed 16 October 2018;

(iii)    an unsworn affidavit of Mr Jason Betts, a partner of Herbert Smith Freehills (HSF), the solicitors for BHP, dated 26 June 2020. I assume this was filed unsworn pursuant to Court protocols adopted during the COVID-19;

(iv)    an affidavit of Ms Christine Tran, a partner of HSF, affirmed 11 December 2020 (the first Tran affidavit);

(v)    two affidavits of Mr Andrew Watson (as his Honour then was), then a partner of Maurice Blackburn Lawyers (MB), the other firm of solicitors for the joint applicants, sworn 15 October 2023 and 27 October 2023 (the first and second Watson affidavits); and

(b)    an affidavit of Ms Irina Lubomirska, Special Counsel with MB, affirmed 29 February 2024

16    BHP relies on an affidavit of Ms Tran affirmed 2 February 2024 (the second Tran affidavits).

17    BHP notes that the second and third Myers’ affidavits were filed and served, without notice, after the due date by which the applicants were required to file and serve any further evidence on the amendment application, but it did not argue that the affidavits should not be accepted. I considered it appropriated to admit all of the affidavits into evidence. None of the deponents were cross-examined.

THE FACTS

The competing class actions

18    Between May and September 2018 three securities class actions were commenced against BHP by three separate law firms, with different funding arrangements. Each proceeding alleged breach of the continuous disclosure obligation and/or misleading or deceptive conduct arising from BHP’s alleged failure to immediately inform the market of the material risk that the Fundão Dam would collapse. The three class actions were:

(a)    this proceeding, Impiombato v BHP Billiton Limited (VID 649 of 2018) (the Impiombato Proceeding), in which PFM were the solicitors for the applicant, which was commenced by originating application and statement of claim on 31 May 2018;

(b)    Klemweb Nominees Pty Ltd (as trustee for the Klemweb Superannuation Fund) v BHP Billiton Limited (VID 1077 of 2018) (the Klemweb Proceeding), in which MB were the solicitors for the applicant, which was commenced by originating application and statement of claim on 31 August 2018; and

(c)    Los Angeles County Employees Retirement Association v BHP Billiton Limited (VID 1218 of 2018) (the LACERA Proceeding), in which Johnson Winter & Slattery were the solicitors for the applicant, which was commenced by originating application and statement of claim on 24 September 2018.

19    Following a hearing to resolve the multiplicity issue, Moshinsky J made orders on 18 December 2018 for the Impiombato Proceeding to continue as a representative proceeding on behalf of the group members, for the Klemweb Proceeding to be permanently stayed and for the LACERA proceeding to be stayed to permit the applicant in the Impiombato Proceeding to investigate extending the claim period to the same period as in the LACERA Proceeding: Impiombato v BHP Billiton Ltd (No 2) [2018] FCA 2045; 364 ALR 162.

20    Following an appeal of that decision the Full Court made orders on 28 May 2019 to set aside the stay of the Klemweb proceeding and to consolidate the Klemweb proceeding with this proceeding: Klemweb Nominees Pty Ltd (as trustee for the Klemweb Superannuation Fund) v BHP Group Limited [2019] FCAFC 107; 369 ALR 583 (Middleton, Beach and Lee JJ).

21    On 16 August 2019 the joint applicants in the consolidated proceeding filed the COA and a Consolidated Statement of Claim. On 7 September 2020, the applicants filed the ACSOC. The COA and the ACSOC are the current pleadings. As I have said, the group definition appears, in different forms but to the same effect, in both the COA and the ACSOC.

BHP’s listing on the ASX, LSE and JSE, and the availability of other trading platforms

22    Ms Tran stated in her first affidavit, and I accept, that during the Relevant Period:

(a)    BHP operated under a dual listed company structure with two parent companies, BHP Ltd incorporated in Australia and BHP Plc incorporated in the UK;

(b)    BHP Ltd had a primary listing on the ASX in Australia and its ordinary shares were admitted for quotation and trading on the ASX;

(c)    BHP Plc had:

(i)    a premium listing on the UK Listing Authority’s Official List and its ordinary shares were admitted to trading on the LSE in the United Kingdom; and

(ii)    a secondary listing on the JSE in South Africa;

(d)    BHP Ltd was admitted to the official list on the ASX and its ordinary shares were available for trading on the ASX and on other exchanges;

(e)    BHP Plc was admitted to the official lists on the LSE and JSE and its ordinary shares were available for trading on the LSE and JSE respectively, and on other exchanges;

(f)    ordinary shares in BHP Ltd:

(i)    were (or had been) issued by BHP Ltd and were maintained by BHP Ltd on a share register that records the identity of the registered shareholders and buy/sell trading activities of those shareholders;

(ii)    could be and were traded on the ASX, being the primary trading platform or exchange;

(iii)    could be and were traded on other trading platforms or exchanges, sometimes referred to as secondary trading platforms, such as the exchange operated by Cboe Australia Pty Ltd (formerly known as Chi-X Australia);

(g)    ordinary shares in BHP Plc:

(i)    were (or had been) issued by BHP Plc and were maintained by BHP Plc on a share register (separate from the share register of BHP Ltd) that records the identity of the registered shareholders and buy/sell trading activities of those shareholders;

(ii)    could be and were traded on the LSE, being the primary trading platform or exchange;

(iii)    could be and were traded on the JSE, being the secondary trading platform or exchange;

(iv)    could be and were traded on other trading platforms or exchanges, such as the exchanges operated by BATS Chi-X Europe;

(h)    there was also a separate (secondary) register for trades in BHP Plc that occurred on the JSE, and those trades were reflected on the (South African) share register of BHP Plc; and

(i)    trades in ordinary shares in BHP Ltd and BHP Plc were reflected on the respective share registers, but (other than as set out in paragraph (h) above) the share registers do not record the platform upon which the trades occurred.

23    Mr Watson stated in the first and second Watson affidavits, and I accept, that during the Relevant Period:

(a)    Chi-X was an alternative trading platform to the ASX for some shares in ASX-listed entities (which he referred to as “Australian securities”), as well as some other financial products. Shares purchased through Chi-X could be sold on the ASX and vice versa, provided that the shares were available on both platforms;

(b)    most online brokers enabled investors to trade Australian securities on Chi-X, including CommSec, NABTrade, Stake, Selfwealth, CMC Markets and Superhero. Generally, when executing a trade through these brokers, an investor would not specify whether the trade should be executed on Chi-X or the ASX. Rather, that was left to the broker’s discretion as informed by their duty to comply with the best execution obligations set out in the ASIC Market Integrity Rules;

(c)    clearing and settlement of trades was conducted by the ASX through its Clearing House Electronic Subregister System (CHESS), which combined settlement services with an electronic CHESS subregister that recorded the ownership details of Australian securities. ASX Ltd, through its wholly-owned subsidiaries ASX Clear Pty Ltd and ASX Settlement Pty Ltd, was the only licensed operator of clearing and settlement facilities for trades in Australian securities. The use of this clearing and settlement arrangement was a condition of the Australian Market License held by Chi-X;

(d)    clearing and settlement of trades executed on Chi-X were facilitated by the ASX and would settle on an investor’s CHESS HIN or directly with share registries in an identical fashion to those traded directly on the ASX. The ASX’s Trade Acceptance Service and Settlement Facilitation Service operated to provide an Approved Market Operator (AMO), such as Chi-X, with centralised clearing and settlement services in an identical fashion to trades executed on ASX’s cash equity market trading platform (known as ASX Trade);

(e)    Chi-X, as an AMO, was entitled to have its trades accepted for clearing by ASX Clear on the same basis as those executed on ASX Trade. For both ASX Trade and Chi-X, ASX Clear acted as a central counterparty (CCP) for the trading of shares, warrants and exchange-traded funds. As a CCP, ASX Clear became liable for the completion of all clear transactions on the relevant market;

(f)    this occurred through a process of novation whereby the original market contract between the trading participant (being a broker authorised on the ASX’s market) representing the buyer and the trading participant representing the seller was discharged and replaced with two new contracts: one between ASX Clear and the clearing participant (being a broker authorised to clear trades through the ASX Clearing House) representing the buyer, and the other between ASX Clear and the clearing participant representing the seller. In this way, ASX Clear became the counterparty assuming the credit risk; and

(g)    as with trades executed on ASX Trade, trades executed on Chi-X were submitted to ASX Clear for registration. Once accepted by ASX Clear, by way of novation, each cash market trade was replaced with a cash market CCP transaction between each participant and ASX Clear. Where the cash market trade was cleared on both sides by the same clearing participant, there was no need for novation and the participant received notification of the trade. Accordingly, a buyer’s interest in a share acquired through a Chi-X placed trade was indistinguishable from one placed directly through the ASX Trade;

(h)    unlike the ASX, Chi-X did not maintain an official list to which corporations could be or were admitted. Rather, Chi-X operated an alternate facility through which Australian securities could be and were traded. No other platform offered this facility during the Relevant Period. Australian securities purchased through Chi-X could be sold through the ASX, and vice versa;

(i)    ordinary shares in BHP Ltd could be, and were, traded on the Chi-X trading platform. However, BHP Ltd was not “listed” on Chi-X, in the terminology of Australian corporations law; and

(j)    shareholdings registered on the CHESS subregister were communicated to the issuer sponsored subregister (in the case of BHP Ltd, its subregister in maintained by ComputerShare Pty Ltd) and vice versa, such that both subregisters contained a complete and consistent record of members and their shareholdings.

The dispute regarding the scope of the group definition

24    The Impiombato Proceeding was filed in May 2018, and the consolidated proceeding was filed in August 2019. The meaning of the group definition was not the subject of any dispute between the parties until June 2023. A dispute arose at that time in the context of deciding the information to be included in the proposed opt out notice.

25    In a letter to PFM dated 2 June 2023, HSF sought clarification of the parameters of the class. Relevantly, the letter said:

We are seeking clarification of the parameters of the class, for the purpose of enabling us to make appropriate inquiries regarding direct notifications to potential group members in the proceedings as that becomes necessary.

Paragraph 3 of the Amended Consolidated Statement of Claim defines the group as persons who entered into a contract to acquire an interest in BHP Group Ltd or BHP Group Plc shares on the ASX, LSE, or JSE.

Please confirm whether your clients contend that group membership is limited to persons who acquired such an interest on the ASX, LSE or JSE, and therefore excludes persons who acquired an interest in BHP Group Ltd or BHP Group Plc shares on other securities trading platforms or venues.

26    By letter to HSF dated 4 August 2023 PFM responded that the applicants’ position was that paragraph 3 of the ACSOC did not exclude persons who acquired an interest in BHP Group Ltd or BHP Group Plc shares on securities trading platforms or venues other than the ASX, LSE or JSE.

27    HSF and PFM then exchanged letters on 16 August 2023, 23 August 2023, 30 August 2023 and 19 September 2023 setting out their respective arguments regarding the proper interpretation of the group definition.

28    On 18 October 2023 a case management hearing took place before Moshinsky J for the purpose of considering the form of a proposed opt-out notice and associated orders, and his Honour heard argument as to the meaning of the group definition.

29    His Honour summarised the applicants’ argument as follows (at [15]-[16]):

The applicants focus on the group member definition in the originating application, which refers to acquiring an interest in shares. They accept that one needs to then go to the statement of claim for the definition of BHP ASX Shares, BHP LSE Shares and BHP JSE Shares. The applicants submit that, when one does so, BHP ASX Shares are defined as meaning “fully paid up ordinary shares in … the Respondent … on the Australian Securities Exchange”. The applicants submit that the word “on” in the definition attaches to the entity (BHP Ltd). The applicants also submit that the definition refers either to the entity (BHP Ltd) being listed on the ASX, or to the ordinary shares in BHP Ltd being quoted (or listed) on the ASX. The applicants submit that BHP LSE Shares and BHP JSE Shares are defined in a comparable way.

The applicants submit that it would make no sense to carve out persons who acquired their shares on other trading platforms. The applicants rely on evidence that, at all times since the commencement of this proceeding, the applicants’ intention has been to bring a proceeding on behalf of all persons who acquired an interest in shares in BHP Ltd or BHP Plc during the Relevant Period. The applicants contend that BHP Ltd has conducted the proceeding on the basis that the group member definition includes persons who acquired shares on other platforms. The applicants submit that, if there is any ambiguity, it should be resolved in favour of the applicants’ interpretation, to avoid a multiplicity of proceedings, consistently with the objects of Pt IVA of the Federal Court of Australia Act 1976 (Cth).

30    His Honour summarised BHP’s argument as follows (at [17]):

BHP Ltd submits that the terms of paragraph 3 of the statement of claim are crystal clear. BHP Ltd submits that the word “on” in each of sub-paragraphs (i), (ii) and (iii) of paragraph 3(a) qualifies the acquisition referred to in the opening lines of paragraph 3(a); thus, the acquisition must have taken place on the relevant exchange. BHP Ltd submits that the group member definition is therefore confined to on-market transactions through the three platforms the applicants have specified. To the extent that the applicants contend that their intention was otherwise, BHP Ltd submits that they have failed to execute their intention. BHP Ltd submits that: the definition of group members in the originating application is not free-standing and needs to be read with the definition in the pleading; for example, Relevant Period is defined in the statement of claim; the originating application states on p 2 that capitalised terms have the same meaning as in the consolidated statement of claim. BHP Ltd submits that the words in the statement of claim have been carefully chosen; if the word “on” meant quoted on, or listed on, the relevant exchange, the words “on the Australian Securities Exchange” would not have been necessary.

31    His Honour preferred BHP’s interpretation of the group definition (at [18]). His Honour held (at [30]) that the correct interpretation of the group definition is that “it covers persons who, during the Relevant Period, entered into a contract to acquire an interest in fully paid-up ordinary shares in BHP Ltd through trading on the ASX, and/or fully paid-up ordinary shares in BHP Plc through trading on the LSE or the JSE.”

The group definition

32    There is no material difference between the group definitions pleaded in the Impiombato and Klemweb Proceedings and subsequently in the consolidated proceeding. I infer that the group definitions in the consolidated proceeding were effectively copied across from the Impiombato and Klemweb Proceedings, rather than redrafted.

The evidence as to the intention of the applicants and their solicitors

33    Mr Watson, Mr Myers and Ms Lubomirska each deposed that the applicants, PFM and MB, always intended that the group definition cover all persons who acquired an interest in BHP Shares during the Relevant Period, irrespective of the trading platform upon which that occurred. BHP, however, criticises their evidence as insufficient to support that conclusion and argues that it should not be accepted.

The applicants’ intention

34    Mr Watson stated as follows in relation to the intention of the first and second applicants in bringing the proceeding (first affidavit at [18] and [19]):

At all times since the commencement of this proceeding, the Applicants’ intention was, and remains, to bring a proceeding on behalf of all persons who acquired an interest in shares in the Respondent or BHP Plc during the Relevant Period. On the Applicants’ case, all such persons would have suffered loss or damage by, or as a result of, the Respondent’s conduct alleged in the ACSOC. There was and is no reason why the Applicants would exclude from the proceeding persons who acquired shares in the Respondent or BHP Plc through platforms other than the ASX, LSE or JSE…

He was not cross-examined.

35    Mr Myers stated as follows (first affidavit at [23]):

When commencing this Proceeding and the Klemweb Proceeding, the Applicants’ intention was, and remains, to bring proceedings on behalf of all persons who acquired an interest in shares in BHP Ltd and/or BHP Plc during the Relevant Period, irrespective of the market or platform or means of trade through which those trades occurred.

36    He also stated (at [53]):

To the extent that the Applicants failed to execute their intention, deposed to at paragraph 23 above, to include all persons who acquired shares in BHP Ltd and BHP Plc in the description of the group members in the originating applications and pleadings filed in the proceedings, that was an inadvertent mistake in the drafting, which the Applicants now seek to correct by their amendment application.

(Emphasis added.)

Mr Myers was not cross-examined.

37    Mr Myers stated (third affidavit at [7]-[8]):

I am informed by Mr Impiombato, that it was his intention to bring proceedings on behalf of a group comprising all people who bought shares in BHP Ltd and/or BHP Plc (BHP).

…I am informed by Mr Impiombato that, at the time he signed the retainer, he understood those paragraphs to be consistent with his understanding that, as the representative applicant, he would represent everyone who acquired shares in BHP.

38    Mr Impiombato’s retainer of PFM (PFM Retainer) and Klemweb’s retainer of MB (MB Retainer) are in evidence. Both the PFM Retainer and the MB Retainer have terms pursuant to which PFM and MB are instructed and authorised to make “day-to-day decisions” in the prosecution of the claims in the proceeding. Such authority must extend to making decisions about the pleadings.

39    In relation to clause 6.3(b) of the PFM retainer, which authorised and instructed PFM to make day-to-day decisions in the prosecution of the claims, Mr Myers stated (third Myers affidavit at [9]):

I am informed by Mr Impiombato that he understands this paragraph of the Retainer to be his instruction to PFM to commence and conduct the proceeding on the basis of his intention that he would represent all people who bought shares in BHP and that the solicitors would work out the technical detail of how the claim would be put together.

40    In relation to the Klemweb’s intention in bringing the proceeding, Ms Lubomirska deposed that Klemweb’s instructions were at all times provided by its director, David Webb. On the basis of information and belief from Mr Webb, she deposed (at [9]-[11]) that he understood that the proceeding would encompass anyone who bought shares in BHP Ltd or BHP Plc in a particular period. She said that Mr Webb did not understand that the claim would be limited in some way based on the exchange, platform or means through which the trades occurred. Ms Lubomirska was not cross-examined.

PFM’s intention

41    Mr Myers stated that at all times since prior to commencing the proceeding PFM’s intention was to bring the proceeding on behalf of all persons who acquired an interest in BHP Shares during the Relevant Period, irrespective of the trading platform upon which that occurred. He said the following (second affidavit at [26]-[28]):

I refer to my experience in shareholder class actions set out in my affidavit sworn 31 July 2023 in this proceeding. From that experience, I am aware that in the usual case the group members are generally described by reference to an acquisition of shares in an ASX-listed entity without necessarily referring to the ASX as part of the description. However, this is an atypical case because of BHP’s dual-listed structure and the fact that the claim is brought on behalf of persons who acquired shares in either or both of BHP Ltd and BHP Plc. As explained above, BHP Ltd is listed on the ASX and its shares are quoted on the ASX. Likewise, shares in BHP Plc are listed on the LSE and JSE.

I understood when the Proceeding was commenced, and at all times since, that the references to the ASX, LSE and JSE in the context of the descriptions of the group members and other parts of the pleadings reflected the dual-listed structure of BHP Ltd and BHP Plc, and referred to shares on the ASX, LSE and JSE in the sense of being listed or quoted on those exchanges. I did not understand the references to the ASX, LSE and JSE to introduce any limitation on, or criterion for, group membership such that a person’s acquisition of shares in BHP Ltd or BHP Plc had to occur through trading on those exchanges.

I am not aware of any Australian shareholder class action where an applicant limited its claims in respect of shares quoted on the ASX by reference to the trading platform on which the trade was executed. I cannot think of a reason why any legal practitioner representing the class would deliberately do such a thing. To do so would, in my opinion, unnecessarily narrow and introduce complexity and uncertainty into the group definition. The intention of PFM, at all times since prior to commencing the Proceeding, was that the proceedings would be brought on behalf of all persons who acquired shares in BHP Ltd and/or BHP Plc during the Relevant Period, irrespective of the platform or other means of trading through which those interests were acquired.

(Emphasis added.)

42    Mr Myers annexed the relevant pages of the bhpclassaction.com website operated by PFM, which commenced to operate on 16 May 2018, including the group member “registration page”, and a notice sent by PFM to institutional investors on 16 May 2018. Neither the registration page nor the notice suggested a limitation in the group definition based on the platform upon which BHP Shares were purchased.

43    However, as the second Tran affidavit shows, that is contradicted by other pages of the PFM website, which described group members as follows:

(a)    at 10 August 2018, as people who:

…acquired shares in BHP Billiton on any of the ASX, LSE or JSE during the period from 21 October 2013 to 9 November 2015;

(b)    at 11 August 2020 and as at 1 February 2024, as people who:

…acquired shares in BHP Group (formerly known as BHP Billiton), on any of the ASX, LSE or JSE during the period between 8 August 2012 to 9 November 2015...”;

(c)    at 17 September 2021, as

…all investors who acquired an interest in:

•    BHP Billiton Limited securities traded on the Australian Stock Exchange (ASX); and/or

•    BHP Billiton Plc securities traded on the London Stock Exchange (LSE) and/or the Johannesburg Stock Exchange (JSE)”;

and

(d)    at 3 December 2022 and as at 1 February 2024, as:

…all eligible shareholders who from 8 August 2012 through 9 November 2015 inclusive (claim period) acquired an interest in:

•    BHP Billiton Limited securities traded on the Australian Stock Exchange (ASX); and/or

•    BHP Billiton Plc securities traded on the London Stock Exchange (LSE) and/or the Johannesburg Stock Exchange (JSE).

MB’s intention

44    Mr Myers gave evidence as to MB’s intention in bringing the proceeding, on the basis of information and belief from Ms Lubomirska and Mr Koo, a partner of MB (second affidavit at [42]). He stated that:

...at all times since prior to the commencement of the Klemweb Proceeding, following consolidation, MB intended to bring the proceedings on behalf of all persons who acquired shares in BHP Ltd and/or BHP Plc during the Relevant Period, irrespective of the platform or other means of trading through which those shares were acquired. I further believe, based on information from Ms Lubomirska and Mr Koo, that always they understood that the references to the ASX, LSE and JSE in the context of the descriptions of the group members reflected the dual-listed structure of BHP Ltd and BHP Plc, and not that group membership was restricted to persons who acquired shares on those specific exchanges.

(Emphasis added.)

45    Mr Myers also stated (at [29]):

I refer to paragraphs [32]–[34] of my December affidavit. Had the Respondent raised its interpretation of the composition of the class in May 2020, I would promptly have sought and obtained instructions to amend the group definition and the pleadings, to put the intended scope of the action beyond doubt and so as to avoid any potential limitations issues that might later be raised by the Respondent. I am informed by Ms Lubomirska and believe that MB would have done likewise in respect of Second Applicant (Klemweb).

46    Mr Myers annexed pages from the MB website prior to February 2019. A version from 3 August 2019 relevantly said:

BHP class action

Maurice Blackburn is commencing a class action on behalf of shareholders of BHP Billiton Limited (ASX:BHP) and, potentially, BHP Billiton Plc (listed on the Johannesburg and London stock exchanges) who suffered losses due to the share price fall following the Fundão Dam collapse on 5 November 2015…

…

Registration

Registration is open to BHP shareholders who acquired an interest in fully paid ordinary shares in BHP during the period between 27 August 2014 and 9 November 2015 (inclusive).

47    The applicants also rely upon:

(a)    a media statement published by MB on 3 August 2018; and

(b)    pages from the MB website which were updated on 9 August 2018 and (following commencement of the Klemweb Proceeding) on 3 September 2018,

which did not express any limitation to eligibility of registration by reference to the trading platform upon which the shares were acquired.

48    However, the second Tran affidavit and the second Myers affidavit show that other pages of the MB website were differently expressed. From February 2020 to the date of the affidavits the page entitled “BHP class action” on the MB website said:

BHP class action

On 31 August 2018 Maurice Blackburn filed a class action on behalf of shareholders of BHP Billiton Limited (ASX:BHP) and BHP Billiton Plc (listed on the Johannesburg and London stock exchanges) who suffered losses due to the share price fall following the Fundão Dam collapse on 5 November 2015.

…

The class action covers eligible shareholders who entered into a contract to acquire an interest in ordinary shares on any of the three above-mentioned stock exchanges between 27 August 2014 and 9 November 2015 inclusive.

(Emphasis added.)

49    From late July or early August 2019 the MB website incorporated a portal for group members to register their claims. At the bottom of the BHP class action page a “Sign up now” button appeared, which linked to a “landing page” for registration. The landing page for registration relevantly said:

Retain Maurice Blackburn in the BHP Class Action

Maurice Blackburn is conducting a class action on behalf of shareholders of BHP Group Limited (ASX: BHP) and BHP Group Plc (listed on the Johannesburg and London stock exchanges) who suffered loss due to the share price fall following the Fundão Dam collapse on 5 November 2015 (BHP shareholders).

…

Who is eligible to participate

Participation is open to persons who acquired an interest in fully paid ordinary shares in BHP during the period between 8 August 2012 and 9 November 2015 (inclusive). We ask, however, that you submit your trading data up until 30 November 2015 if available.

The BHP class action also extends to claims of shareholders of BHP Group Plc who acquired shares on the Johannesburg Stock Exchange and/or the London Stock Exchange during the relevant period. If you hold shares that were acquired on either exchange during 8 August 2012 and 9 November 2015, we welcome you to retain us, specifying which stock exchange they were acquired on.

50    It further noted that readers “will also be asked to provide details about the claimant’s shareholding(s), including… the stock exchange upon which the shares were purchased, being the Australian Stock Exchange (ASX), the Johannesburg Stock Exchange (JSE) or the London Stock Exchange (LSE).”

51    If the reader proceeded with registration and wished to retain Maurice Blackburn they were presented with the MB Retainer which described the claimant as “the person(s) who acquired an interest in shares of BHP during the period of 8 August 2012 to 9 November 2015, inclusive, or such other period as Maurice Blackburn may advise”.

52    From August 2019 to the date of the affidavits the MB website continued to contain such statements.

53    Mr Myers stated (second affidavit at [58]), on the basis of information and belief from Ms Lubomirska, that the MB website was intended to communicate to prospective group members that MB was running a class action on behalf of those persons who purchased shares of BHP Ltd (which is listed on the ASX) and BHP Plc (which is listed on LSE and JSE) in the specified period. He said that he was informed by Ms Lubomirska and believes that it did not occur to her that the references in some versions of the MB website to the purchase of shares on the particular markets, that such references were open to an interpretation other than a reference to the fact that BHP Ltd and BHP Plc shares are listed on those markets. Ms Lubomirska said that the website was not intended to be read technically or to convey a definition of group membership limited to persons who acquired their shares through trades using specific platforms.

54    I accept BHP's submissions as to the information on the PFM and MB websites from prior to the commencement the proceeding to the present. Contrary to the applicants’ contentions, I do not consider that the contemporaneous documents show that MB or PFM always intended that the proceeding be brought on behalf of all persons who bought BHP Shares during the Relevant Period, without limitation by reference to the trading platform upon which that occurred. Some contemporaneous documents point in favour of that conclusion and others point away. The documentary evidence is contradictory and insufficient to support a conclusion either way. That is not, however, to say that I do not accept the evidence of Mr Watson, Mr Myers and Ms Lubomirska.

Whether the parties conducted the proceeding in a manner consistent with the Excluded Shareholders being group members

55    Mr Myers further stated (first affidavit at [25]) that at all times since the commencement of the case, the applicants have conducted the proceeding on the basis that the class included all persons who, during the Relevant Period, acquired an interest in fully paid up ordinary shares in BHP Ltd and/or BHP Plc, without reference to the trading platform upon which those shares were acquired. He also stated that BHP conducted the proceeding on that basis until 2 June 2023 when the respondent first raised the group definition issue with the applicants.

The applicants’ conduct

56    In relation to the applicants’ conduct, Mr Myers relied on, amongst other things:

(a)    the applicants’ submissions in the common fund application in the proceeding filed in August 2018, which said that the group in the proceeding was an open class of persons who, during the Relevant Period:

…acquired shares in the Respondent (BHP Billiton Limited) listed on the ASX and BHP Billiton Plc listed on the LSE and JSE.

The submissions do not suggest a limitation or restriction on group membership by reference to the trading platform upon which BHP Shares were acquired;

(b)    in support of the common fund application, the first applicant filed an affidavit of his solicitor, Mr Finney, deposing to the number of relevant shares in BHP Ltd and BHP Plc. Mr Finney’s calculation of the relevant shares did not exclude shares of persons who only acquired their shares through trading on secondary markets; and

(c)    the applicants’ submissions in the multiplicity dispute filed in October 2018, which said that the group in the proceeding was:

…an open class of persons who acquired shares in BHP Ltd and/or BHP Plc during the [Relevant Period].

57    Mr Watson stated (first affidavit at [19]):

At all times, the Applicants have conducted the proceeding on the basis that the group members included all persons who had acquired an interest in shares in the Respondent and BHP Plc during the Relevant Period.

Mr Watson relied on the applicants’ submissions in the multiplicity dispute, and also to Mr Phi’s affidavit of 16 October 2018 which contained an estimate of the number of BHP Shares acquired by group members who had retained the firm, which estimate did not exclude shares purchased on secondary platforms.

58    The applicants also relied on other statements on MB’s and PFM’s websites and other communications to prospective group members.

59    Again, I consider the contemporaneous documents are inconclusive as to whether at all times the applicants conducted the proceeding on the basis that the group members included all persons who acquired BHP Shares during the Relevant Period. There are documents pointing both ways. That is not, however, to say that I do not accept the evidence of Mr Watson, Mr Myers and Ms Lubomirska.

BHP’s conduct

60    In relation to BHP’s conduct, amongst other things, Mr Myers relied on:

(a)    affidavits and submissions put on by BHP in the strikeout application in Impiombato v BHP Group Limited (No 2) [2020] FCA 1720 (Impiombato No 2) and his Honour’s reasons;

(b)    affidavits and submissions put on by BHP in seeking leave to appeal from Impiombato No 2 and the reasons of the Full Court in BHP Group Limited v Impiombato [2021] FCAFC 93; and

(c)    submissions by BHP in the appeal to the High Court, and the reasons of the High Court in BHP Group Limited v Impiombato in [2022] HCA 33; 405 ALR 402 (Impiombato (HC)).

Mr Myers said that none of those materials suggested a limitation or restriction on group membership by reference to the trading platform upon which BHP Shares were acquired.

61    I am not persuaded that the contemporaneous documents show that until June 2023 BHP always conducted the proceeding on the basis that the class included all persons who acquired an interest in BHP Shares in the Relevant Period, irrespective of the trading platform upon which they did so. The documents on which the applicants rely are in my view inconclusive. In some contemporaneous documents, BHP expressed the group definition without any limitation by reference to the trading platform upon which BHP Shares were acquired, and in others it expressed the group definition as pleaded. Further, the calculation of the trading volumes of BHP shares during the Relevant Period set out in Mr Betts’ 26 June 2020 affidavit is consistent with BHP having understood that the group definition only covers persons who acquired BHP shares on one or other of the primary platforms.

The evidence as to whether there was any logical reason for the applicants to limit the class to those persons who acquired shares on the ASX, LSE or JSE

62    Mr Myers stated (second affidavit at [28]):

I am not aware of any Australian shareholder class action where an applicant limited its claims in respect of shares quoted on the ASX by reference to the trading platform on which the trade was executed. I cannot think of a reason why any legal practitioner representing the class would deliberately do such a thing. To do so would, in my opinion, unnecessarily narrow and introduce complexity and uncertainty into the group definition.

63    Mr Watson stated (first affidavit at [54]):

There was and is no reason why the Applicants would exclude from the proceeding persons who acquired shares in the Respondent or BHP Plc through platforms other than the ASX, LSE or JSE…

64    For the reasons I later explain, I accept that evidence.

The applicants’ assertions of prejudice

65    Mr Myers stated that both the Excluded Shareholders and the existing group members will suffer substantial prejudice if leave is not granted for the Group Definition Amendments and for those amendments to take effect from the commencement of the proceeding.

The asserted prejudice to Excluded Shareholders

66    Mr Myers said (first affidavit at [55]-[57]) that the Excluded Shareholders will suffer two types of prejudice:

(a)    first, they will be unable to benefit from the proceeding, including by sharing in any favourable settlement or judgment; and

(b)    second, they “will have had” reasonable grounds to believe that they were group members in the proceeding and therefore will not have taken any steps to preserve their rights against BHP outside of the proceeding and/or the earlier competing proceedings. Mr Myers said that, having regard to the limitation periods applicable to the claims made in the proceeding, there is a real risk that, that unless the amendments operate from the commencement of the proceeding, or the limitation periods are extended, BHP may raise a limitations defence to any claim brought by the Excluded Shareholders to seek to vindicate their rights.

67    In relation to the number of persons who may meet the description of “Excluded Shareholder” Ms Tran said (second affidavit at [24]), and I accept, that during the Relevant Period:

(a)    approximately 884.3 million shares in BHP Group Ltd were traded on Chi-X Australia;

(b)    approximately 681.9 million shares in BHP Group Plc were traded on Better Alternative Trading Systems (BATS); and

(c)    approximately 1.731 billion shares in BHP Group Plc were traded on Chi-X Europe.

Therefore, a total of approximately 3.3 billion BHP Shares were traded on secondary platforms during the Relevant Period.

68    There is no evidence as to the number of Excluded Shareholders or as to how many BHP Shares they acquired during the Relevant Period.

The asserted prejudice to existing group members

69    It is uncontentious that the ASIC Market Integrity Rules (ASX Market) 2010 (Cth) (ASX Market Integrity Rules) and the ASIC Market Integrity Rules (Chi-X Australia Market) 2011 (Cth) (Chi-X Market Integrity Rules) are substantively identical. At all material times those rules governed the activities or conduct of the ASX and Chi-X Australia markets, including the activities or conduct of persons in relation to those markets and in relation to the financial products traded on those markets during the Relevant Period, until the introduction of the ASIC Market Integrity Rules (Securities Markets) 2017 (Cth) in November 2017.

70    Mr Myers stated (first affidavit at [60]) that the share registers for BHP Ltd and BHP Plc reflect the trades in ordinary shares, but do not record the trading platform on which the trades occurred. Thus, the issue of the trading platform used to execute a share acquisition cannot be resolved by reference to share registry data. That is uncontentious and I accept it.

71    He said (at [61]) that in his experience, most retail investors execute market trade through brokers, including online brokers, and do not provide instructions as to the trading platform upon which their trade is to be executed. That evidence was unchallenged and I accept it. He also said that most brokers do not provide retail investors with details of the trade platform used to execute the trade. I accept that too.

72    Consequently, Mr Myers considered it unlikely that group members who acquired relevant BHP Shares through a broker would be in possession of information as to the trading platform upon which the shares were acquired. To obtain that information they would need to make inquiries of their broker. In my view that is likely to be the case for many group members.

73    Mr Myers said (at [62]) that rule 4.1.4 of the ASX Market Integrity Rules (which is identical to rule 4.1.4 of the Chi-X Market Integrity Rules) provides that brokers must keep records of share transactions for a period of seven years from the date the record was made. This evidence is uncontentious and I accept it.

74    Consequently, Mr Myers considered it likely that many brokers would no longer have records which show the exchange or trading platform used to execute acquisitions of BHP Shares in the Relevant Period of 8 August 2012 to 9 November 2015. For the reasons I explain, I accept that too.

75    Based on his experience acting in securities class actions, he said (at [63]) that at least some brokers which executed trades in BHP Shares in the Relevant Period will no longer be in business, or will have transferred their businesses to a different entity, further complicating any efforts to identify the trading platform on which trades were executed. That is obvious and I accept it.

76    Mr Myers also said (at [65]) that sophisticated investors do not routinely provide data regarding the exchange or trading platform on which the acquisition of shares was made when providing their trade data in the form of unedited exports from investor data analysis software. That evidence is unchallenged and I accept it.

77    In respect of investors located outside of Australia, he said (at [66]) that enquiries in respect of the exchange or trading platform on which share trades were executed will be even more complicated due to the combination of differences in geographic location and differences in the laws governing data retention and the complexities in obtaining information for the purposes of a foreign proceeding. I accept that too.

78    The thrust of Mr Myers’ evidence is that, if leave is not granted for the Group Definition Amendments to relate back to the commencement of the proceeding, many existing group members are likely to face significant difficulties in establishing the platform or exchange upon which they acquired an interest in BHP Shares during the Relevant Period. He said they will be prejudiced because it is likely that they will face:

(a)    the significant burden of undertaking fact intensive enquiries to identify the trading platform on which trades were executed to demonstrate their group membership and eligibility for compensation;

(b)    significant costs and delay associated with such enquiries;

(c)    added complexity for opt out, registration and any class closure;

(d)    a chilling effect on group member registration; and

(e)    significant additional complexity for the applicants’ lawyers in estimating the potential value of the claims in the proceeding, which will delay and will make it more difficult for the parties to reach a settlement at any mediation.

79    Ms Tran said in her second affidavit, and I accept, that the ASX Market Integrity Rules and the Chi-X Market Integrity Rules provide that:

(a)    a “participant” in the ASX market (i.e. a person admitted to trade under the operating rules of the ASX) must not accept or execute instructions from a client to acquire shares, except in accordance with the ASX Market Integrity Rules; enter into a “Market Transaction” except in accordance with the instructions of the client; or allocate a Market Transaction to a client’s account unless the transaction was entered into on the instructions of the client;

(b)    a participant must give a confirmation to the client in respect of each Market Transaction entered into on the client’s instructions;

(c)    a participant must keep records showing “particulars of the instructions” given by the client, which includes, without limitation, the time an order is placed onto the trading platform and by whom, and if that order gives rise to a Market Transaction, the date and time that occurs; and

(d)    records must be kept for seven years from the date the record is made. Ms Tran described that as the minimum record-keeping requirement, and said that she expected participants may keep records for longer than seven years.

80    Ms Tran also said, on the basis of information and belief from Mr Mathew Blundell, a former trader with Citigroup Australia with more than 30 years of trading experience in Australia, that during the Relevant Period:

(a)    investment or fund managers who wish to acquire shares would typically issue an order to their in-house “dealer”, identifying the number of shares they wish to acquire;

(b)    the dealer would then send instructions to the broker (or “participant) (such as an investment bank) on how the order should be executed;

(c)    these instructions can be detailed, including whether the purchases should occur over the day, whether the purchases should occur pre-open, whether the purchases are made in a block or smaller parcels, whether the purchases should be made through a specific trading platform and so on;

(d)    brokers would then execute the trades according to those instructions;

(e)    if no instructions are received as to the trading platform:

(i)     brokers who can access multiple trading platforms (such as investment banks) have algorithms that allow them to execute orders across multiple platforms at the same time, and those brokers will have a record of the platform or platforms the shares were purchased on and how those shares were allocated to client accounts; and

(ii)     brokers who can access only one trading platform will execute the orders on that platform, and those brokers will have a record of those transactions;

(f)    retail investors who wish to acquire shares would typically go to a retail broker (such as Commsec), who would then execute the trade according to the instructions of the retail investors in the same way described above;

(g)    detailed records are kept by brokers to ensure compliance with ASIC market rules (including the ASX Market Integrity Rules and the Chi-X Market Integrity Rules) as well as verifying orders in-house and to meet KYC requirements; and

(h)    those records must be kept for 7 years and, depending on the internal policies of the broker, may be kept for more than 7 years.

(Emphasis added.)

I accept that evidence too.

81    Ms Tran then said (at [35]-[39]) that in her view Mr Myers overstated the practical difficulties that might arise for existing group members, as:

(a)    the applicable market integrity rules demonstrate that it is possible to identify whether a share was acquired on the ASX or elsewhere by way of instructions given by a client to a “participant” in the relevant market, and by the records kept by the participant who executes the trades (which records may be kept for more than seven years);

(b)    group members may know the trading platform upon which their BHP Shares were acquired because of the instructions they gave to their dealer/broker;

(c)    a group member’s broker(s) might not have access to multiple trading platforms and therefore the inquiries would not be lengthy or burdensome; and

(d)    the group member’s broker(s) may continue to hold electronic records of trades made, organised in a way that the required inquiries might not be time-consuming or onerous;

82    Ms Tran said that it is not at all unusual for group members to take steps and undertake inquiries to confirm whether they are part of a class in a representative proceeding. And even if the Group Definition Amendments are permitted to relate back, group members will still need to identify the relevant contract and the relevant interest which they acquired (which could be a beneficial interest such that the group member’s name may not appear on the share register). She also said that concerns about the level of detail or quality of eligibility or loss information of group members generally do not frustrate the orderly conduct of class action proceedings through to the initial trial of common issues, and that variability in eligibility and loss information provided by group members are not novel or unique to the present case.

83    Ms Tran said (at [34]) that she anticipated that market integrity rules and practices similar to those operating in Australia applied to securities trading in England and South Africa. In Ms Tran’s view, the difficulties and complexities to which Mr Myers referred were not insurmountable, or particularly difficult or unusual.

84    The second Myers affidavit addressed the second Tran affidavit.

85    In relation to Ms Tran’s expectation that similar market integrity rules and practices to those operating in Australia apply in England and South Africa, Mr Myers deposed that:

(a)    the BATS Chi-X Europe Rule Book (BATS Europe Rules) for the relevant period required that a participant must retain a record of each transaction executed through the Cboe Market for at least five years (at [65]);

(b)    the Rules of the London Stock Exchange (LSE Rules) during the Relevant Period required that a participant must retain records of dealings on the LSE for a period of at least three years from the date the trade record is made (at [67]); and

(c)    the Johannesburg Stock Exchange Equities Rules (JSE Rules) during the Relevant Period required that all instructions given by client to execute transactions on the JSE must be kept for a period of at least six months after the relevant transactions, and all other client records (including transaction documentation relating to clients) must be kept for at least five years after the rendering of the concerned services (at [68]).

At least in relation to the time periods for retention of share transaction records that evidence directly contradicted Ms Tran’s evidence as to what she anticipated was the case. I prefer Mr Myers’s evidence as to the time periods for retention of share transaction records under the LSE Rules and JSE Rules.

86    In relation to Ms Tran’s view that group members’ brokers may keep share transaction records for longer than the required seven year period, Mr Myers stated (at [61]) that he had reviewed the privacy policies of the major retail brokers CommSec, NAB Group (which applied to Nabtrade), ANZ Group (which applied to ANZ e*Trade), Westpac Group (which applied to Westpac Share Trading), and Macquarie Group (which applied to Macquarie Trading Online). Importantly, he said that all of the privacy policies provided for the deletion of personal information records as soon as that information is no longer required.

87    Mr Myers therefore considered it likely that brokers would not keep their records beyond the period they were contractually obligated to do so under the ASX, LSE and JSE Rules, that being what their privacy policies required. I prefer Mr Myers’ evidence to Ms Tran’s evidence as to what she thought may happen.

88    In relation to Ms Tran’s view that group members’ brokers might not have access to multiple trading platforms, Mr Myers stated that he reviewed the terms and conditions and/or best execution policies for the major retail brokers CommSec, Nabtrade, ANZ e*Trade, Westpac Share Trading, and Macquarie Trading Online during the Relevant Period. Based on that review, he said that with the exception of Macquarie Trading Online (which had a policy of not executing trades on Chi-X Australia during the Relevant Period) all of the major retail brokers had access to multiple trading platforms. I prefer Mr Myers’ evidence to Ms Tran’s evidence that brokers might not have access to multiple trading platforms.

89    In my view Mr Myers’ evidence substantially reduced the probative value of Ms Tran’s evidence as to the likelihood that, by inquiring from their brokers, group members are likely to be able to ascertain the trading platform or exchange upon which BHP Shares were acquired on their behalf during the Relevant Period. I found her evidence that:

(a)    group members may know the trading platform upon which their BHP Shares were acquired, because of instructions they gave to their dealer/broker;

(b)    group members’ brokers might not have access to multiple trading platforms, and therefore the enquiries required would not be lengthy or burdensome; and

(c)    group members’ brokers may continue to hold electronic records of trades made given the applicable record-keeping requirements,

both uncertain and self-servingly optimistic.

90    For the reasons I later explain in more detail, I am satisfied that existing group members are likely to suffer significant prejudice if the Group Definition Amendments are not permitted to relate back to the commencement of the proceeding.

The asserted prejudice to BHP

91    BHP contends that it is likely to suffer two species of prejudice if leave is granted for the Group Definition Amendments to relate back to the commencement the proceeding.

92    The first species of asserted prejudice is that the inclusion of the share transactions by Excluded Shareholders in the class will “evidently substantially” increase the securities which are alleged to give rise to losses by group members, and will substantially increase BHP’s potential aggregate liability in the proceeding, with implications not only for its possible liability following a judgment, but also for the quantum of any reasonable settlement that might be negotiated. BHP relies on Ms Tran’s evidence that during the Relevant Period a total of approximately 3.3 billion BHP Shares were traded on secondary platforms.

93    I accept that allowing the Group Definition Amendments will expand the class, and therefore increase BHP’s potential aggregate liability in the proceeding. It will be prejudiced as a result. However, as I later explain, I am not persuaded that the prejudice will be as great as BHP contends.

94    The second species of asserted prejudice is the asserted loss by BHP of the ability to rely on limitations defences in relation to the claims of Excluded Shareholders brought into the class by the relation back of the Group Definition Amendments. I will deal with this contention in the Consideration section of these reasons.

RELEVANT PRINCIPLES: GROUP DEFINITION AMENDMENTS

95    The applicants seek leave to make the Group Definition Amendments pursuant to s 33K(1) and 33ZF(1) of the Federal Court of Australia Act 1976 (Cth) (FCA) (and r 8.21 of the Rules, together with rr 1.32, 1.33, 1.34 and 1.35 to the extent necessary), and for those amendments to relate back to the commencement of the proceeding.

96    Section 33H(1)(a) in Part IVA of the FCA provides that an originating application, or “a document filed in support of such an application” must “describe or otherwise identify the group members to whom the proceeding relates." As I have said, here the group description (which I call the group definition) appears in both the originating application and the statement of claim.

Power to grant leave to amend a group definition in an originating application and for the amendment to “relate back”

97    In relation to the power to amend a group definition in an originating application, s 33K(1) of the FCA provides as follows:

Causes of action accruing after commencement of representative proceeding

(1)    The Court may at any stage of a representative proceeding, on application made by the representative party, give leave to amend the application commencing the representative proceeding so as to alter the description of the group.

(2)    The description of the group may be altered so as to include a person:

(a)    whose cause of action accrued after the commencement of the representative proceeding but before such date as the Court fixes when giving leave; and

(b)    who would have been included in the group, or, with the consent of the person would have been included in the group, if the cause of action had accrued before the commencement of the proceeding.

(3)    The date mentioned in paragraph (2)(a) may be the date on which leave is given or another date before or after that date.

(4)    Where the Court gives leave under subsection (1), it may also make any other orders it thinks just, including an order relating to the giving of notice to persons who, as a result of the amendment, will be included in the group and the date before which such persons may opt out of the proceeding.

(Emphasis added.)

98    Although the heading of s 33K suggests that it is only concerned with an amendment to a group definition to include persons whose causes of action accrued after commencement of the proceeding, the authorities provide that the section is not so limited, and the provision empowers the Court to grant leave in respect of any amendment to the group definition once a proceeding has been commenced: Bray v F Hoffman-La Roche Ltd [2003] FCA 1505 at [25] (Merkel J); Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 3) [2010] FCA 361; 267 ALR 494 at [54] (Flick J). I should, though, note that those authorities date from a period when the Acts Interpretation Act 1901 (Cth) provided that section headings in an Act are not part of the Act: c.f. s 13(1) of the present Act.

99    By an infelicity in the drafting of s 33K(1) it only empowers the Court to grant leave to amend a group definition where it appears in an originating application. But it does not conceal a negative implication that a group definition contained in a statement of claim cannot be amended: Gibson v Malaysian Airline System Berhad (No 2) [2017] FCA 701 at [14] (Perram J).

100    There is nothing in s 33K(1) to indicate that an amendment to a group definition will only take effect from the date of amendment, and cannot be ordered to take effect from an earlier date. And s 33K(4) expressly authorises the Court, when granting leave to amend a group definition under subs (1), to “make any other orders it thinks just”. Depending upon the circumstances in a case it may be “just”, and therefore within power under s 33K(1) and (4), to order that an amendment to a group definition in an originating application takes effect from the date of commencement of the proceeding.

101    Further, the express power in s 33K does not preclude the operation of the Rules as a source of power to amend an originating application: Revian v Dasford Holdings Pty Ltd [2001] FCA 777 at [9] (RD Nicholson J). Here, the applicants rely on r 8.21 of the Rules (together with rr 1.32, 1.33, 1.34 and 1.35 to the extent necessary).

102    Section 59(2B) of the FCA provides:

The Rules of Court may make provision for:

(a)    the amendment of a document in a proceeding; or

(b)    leave to amend a document in a proceeding;

even if the effect of the amendment would be to allow a person to seek a remedy in respect of a legal or equitable claim that would have been barred because of the expiry of a period of limitation if the remedy had originally been sought at the time of the amendment.

(Emphasis added.)

It was introduced into the FCA so as to empower the Court to make rules abrogating the traditional rule in Weldon v Neal (1887) 19 QBD 394 at 395 (Lord Esher M.R.): see Explanatory Memorandum to the Law and Justice Legislation Amendment Bill 1994 (Cth) at [114]-[115]. Under that traditional rule a party was not permitted to amend a proceeding when it prejudiced the rights of the opposite party as existing at the date of such amendment. That rule had some harsh effects and as a result, it was abolished by statute in most Australian jurisdictions.

103    Rule 8.21, made pursuant to the rule making power in s 59(2B), provides:

Amendment generally

(1)    An applicant may apply to the Court for leave to amend an originating application for any reason, including:

(a)     to correct a defect or error that would otherwise prevent the Court from determining the real questions raised by the proceeding; or

(b)     to avoid the multiplicity of proceedings; or

(c)    to correct a mistake in the name of a party to the proceeding; or

(d)    to correct the identity of a party to the proceeding; or

(e)    to change the capacity in which the party is suing in the proceeding, if the changed capacity is one that the party had when the proceeding started, or has acquired since that time; or

(f)    to substitute a person for a party to the proceeding; or

(g)    to add or substitute a new claim for relief, or a new foundation in law for a claim for relief, that arises:

(i)    out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the applicant; or

(ii)    in whole or in part, out of facts or matters that have occurred or arisen since the start of the proceeding.

(2)    An applicant may apply to the Court for leave to amend an originating application in accordance with paragraph (1)(c), (d), (e) or subparagraph (g)(i) even if the application is made after the end of any relevant period of limitation applying at the date the proceeding was started.

(3)    However, an applicant must not apply to amend an originating application in accordance with subparagraph (1)(g)(ii) after the time within which any statute that limits the time within which a proceeding may be started has expired.

(Emphasis added.)

104    At first blush, none of the heads under r 8.21(1)(a)-(g) seem to be applicable on the facts of this case. However, in McGraw-Hill Financial, Inc v Clurname Pty Ltd [2017] FCAFC 211; 123 ACSR 467 at [23]-[25] (Allsop CJ, Jagot and Yates JJ) the Full Court explained that the circumstances set out in r 8.21(1)(a)-(g) are not an exhaustive statement of the circumstances in which the Court may grant leave for an amendment to an originating application, and the circumstances in r 8.21(2) are not an exhaustive statement of the circumstances in which the Court may grant leave for an amendment to relate back to an earlier date, even if the application is made after the end of any relevant limitation period. Their Honours said (at [23]-[25]):

[23]    The language of r 8.21(1) is clear: an applicant may apply to the Court for leave to amend an originating application for any reason “including” any of the reasons in r 8.21(1)(a)-(g). Subrules (a) to (g) are examples of amendments that may be the subject of application. They are not a code. Thus, the interaction of r 8.21(1)(g) and (2) does not mean that the Court’s power to permit an amendment asserted to involve a statute-barred claim is confined to the circumstances in r 8.21(1)(g)(i). We leave to one side for further argument the proper approach to an amendment introducing an unarguably statute-barred claim. Nevertheless, the following considerations undermine any rigid or bright-line approach exclusively based on r 8.21(1)(g) and r 8.21(2).

[24]    The Federal Court Rules must also be construed as a whole. Apart from the fact that the power to apply to amend is expressed inclusively in the opening words of r 8.21(1), other rules disclose the true position. Thus, the rules include

R 1.32

The Court may make any order that the Court considers appropriate in the interests of justice.

R 1.33

The Court may make an order subject to any conditions the Court considers appropriate.

R 1.34

The Court may dispense with compliance with any of these Rules, either before or after the occasion for compliance arises.

R 1.35

The Court may make an order that is inconsistent with these Rules and in that event the order will prevail.

…

[25]    Rules 1.32 to 1.35 are important weapons in the Court’s armoury to enable the overarching purpose… to be achieved as identified in s 37M of the [FCA] Act. The overarching purpose is to facilitate the just resolution of disputes according to law, as quickly, inexpensively and efficiently as possible. Faced with these provisions to construe r 8.21(1)(g) as an exclusive power to permit a statute-barred amendment let alone a merely arguably statute-barred amendment (as in the present case) only in the circumstances permitted by r 8.21(2), is inconsistent with the language of the Rules and inimical to the overarching purpose in s 37M of the [FCA] Act.

(Emphasis added.)

Power to grant leave to amend a group definition in a statement of claim and for the amendment to “relate back”

105    Section 33ZF authorizes the Court to “make any order the Court thinks appropriate or necessary to ensure justice is done in the proceeding”. Given the infelicity in the drafting of s 33K(1), the “gap filling” power in s 33ZF is a source of power to grant leave to amend the group definition in a statement of claim, and to permit the amendment to relate back: Ethicon Sàrl at [16]-[17]. Depending upon the circumstances of the case, it may be appropriate or necessary to ensure justice is done in the proceeding to grant leave to amend a group definition in a statement of claim and for the amendment to relate back, and thus within power under s 33ZF.

106    Having regard to the above I consider the Court has power to grant leave to amend a group definition, whether it appears in an originating application or a statement of claim, and for the amendments to relate back to the commencement of the proceeding, notwithstanding that the application is made after the expiry of a limitations period. BHP did not contend otherwise. Whether to allow the Group Definition Amendments and to allow those amendments to relate back to an earlier date requires the exercise of discretion.

General principles regarding amendment

107    In Caason Investments Pty Ltd v Cao [2015] FCAFC 94; 236 FCR 322 at [19]-[21]) (Gilmour and Foster JJ) the Full Court explained:

(a)    the power of the Court to grant or refuse leave to amend must be exercised in the way that best promotes the Court’s overarching purpose to facilitate the just determination of disputes according to law as quickly, inexpensively and efficiently as possible, citing s 37M of the FCA and the Rules;

(b)    the Court’s power to grant leave to amend is a broad power which has the remedial objective of ensuring that any defect is cured and that the real issues in the dispute are properly agitated, citing Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 at [14];

(c)    the object of the Court is not to punish parties for mistakes made in the conduct of their case, but to correct errors with the result that a decision can be made on the real matters in controversy, citing Clough v Frog (1974) 4 ALR 615 at 618 and Cropper v Smith (1884) 26 Ch D 700 at 710-711; and

(d)    leave to amend should be granted unless the proposed amendment is futile or where the amendment would cause substantial prejudice or injustice to the opposing party in a way that cannot be compensated by an award of costs, citing Research in Motion Ltd v Samsung Electronics Australia Pty Ltd [2009] FCA 320; 176 FCR 66 at [21]-[22]; Ron Medich Properties Pty Ltd v Bentley-Smythe Pty Ltd [2010] FCA 494 at [8].

Those considerations are material to my decision.

Principles regarding the relation back of amendments

108    In Street v Luna Park Sydney Pty Ltd [2006] NSWSC 230 at [46]-[52] Brereton J usefully reviewed the authorities regarding the doctrine of relation back in the context of claims that are said to be statute-barred. His Honour said (at (46]) that ordinarily “an amendment, duly made, takes effect, not from the date the amendment is made, but from the date of the original document which it amends,” citing Baldry v Jackson [1976] 2 NSWLR 415 at 419 (Samuels JA with whom Moffitt P and Glass JA agreed). In Ethicon Sàrl (at [47]) the Full Court described that statement as to the ordinary position as “somewhat of an overgeneralisation” but accepted that to the extent there is a “usual position” it is as explained in Street.

109    Brereton J noted that the authorities have considered the doctrine of relation back largely in the context of two categories of proposed amendments:

(a)    those which would introduce a new cause of action after the limitation period for its commencement had expired; and

(b)    those which would add a new defendant after the applicable limitation period against that defendant had expired.

110    In relation to the first category, Brereton J said (at [49]) that the law since 1970 is that it is permissible allow an amendment to introduce a new cause of action, with effect from the commencement of the proceeding, even where doing so may deprive the respondent of a limitations defence. Such an amendment will not be futile, because the amendment relates back to the original pleading. That approach is reflected in rr 8.21(1)(g)(i) and (2) and 16.53(2) of the Rules, which provide that an originating application and a statement of claim may be amended to add or substitute a new claim for relief or a new foundation for a claim, that arises out of the same or substantially the same facts as the existing claims, notwithstanding that since the commencement of the proceeding the limitation period applicable to the new claim has expired.

111    In relation to the second category, his Honour said (at [47]) that the relation back principle does not apply to an amendment which adds a respondent. He said that where a party is added to a proceeding, the proceeding against that party commences only on the date of its joinder, so that the relation back doctrine does not deprive that party of any limitation defence. In Lee v Parker (No 2) [2022] FCA 582 at [113] Halley J held that there was no difference in principle between granting leave for the relation back of an amendment to join a new respondent (and thereby depriving the new respondent from raising a limitation defence) and granting leave for the relation back of an amendment to join a new claimant (and thereby depriving an existing respondent from raising a limitation defence). His Honour declined to allow the relation back of an amendment to join a new claimant.

Principles regarding amendments to correct a mistake in the name or identity of a party

112    Amendments to correct a mistake in the name or identity of a party are another category of cases in which the courts often allow amendments to relate back to the commencement of a proceeding, notwithstanding that since the commencement of the proceeding the applicable limitation period has expired. The proposed Group Definition Amendments are not, of course, amendments to correct a mistake in the name or identity of a party. Group members are not parties, and an amendment to a group definition to expand the class does not mean that the new group members are becoming parties: Ethicon Sàrl (at [50]). Even so, orders granting leave to correct a lawyer’s mistake in the name or identity of a party and thereby adding a party to a proceeding, and orders granting leave to correct a lawyer’s mistake in a group description and thereby adding group members to a proceeding, have some similarities.

113    Rules 8.21(c) and (d) and 8.21(2) of the Rules authorise the Court to grant leave for amendments to an originating to relate back to an earlier date, notwithstanding the claims are said to be statute-barred. And the Full Court in McGraw-Hill (at [23]-[26]) explained that the power under r 8.21(2) to permit a statute-barred amendment to relate back to an earlier date is not restricted to the circumstances in 8.21(1)(c), (d) and (g)(i). The Full Court said that whether to allow an amendment and to allow the amendment to relate back to an earlier date must have regard to the interests of justice in the case and the overarching purpose of the civil practice and procedure provisions under s 37M to facilitate the just determination of disputes according to law as quickly, inexpensively and efficiently as possible.

114    The leading authority is Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 where the High Court considered whether leave should be granted for an amendment to a proceeding to substitute a new party to correct a mistake in the name of a party under r 36.01 of the Supreme Court Rules 1986 (Vic), and for the amendment to relate back to the commencement of the proceeding.

115    The facts of the case were that Bridge Shipping was engaged by Philip Morris to arrange the carriage of tobacco from Brazil to Melbourne by sea. Bridge Shipping arranged the carriage of the tobacco on the vessel “Green Sand”. Upon arrival some of the tobacco was missing and some was damaged. Philip Morris sued Bridge Shipping for damages in the Supreme Court of Victoria. Bridge Shipping issued a third party notice against Grand Shipping SA, which a search of the Lloyd’s Register had revealed to be the registered owner of the Green Sand. Bridge Shipping later discovered that Grand had chartered that vessel to Rainbow Lines SA by a bare boat charter and thus Rainbow Lines had been the carrier of the tobacco. By that time the limitation period under the Hague Rules for commencing a proceeding against Rainbow Lines had expired.

116    Bridge Shipping applied to substitute Rainbow as a party for Grand on the basis of “a mistake in the name of a party” pursuant to r 36.01 and for the amendment to relate back to the commencement of the proceeding. Rule 36.01 (5) provided that “[w]here an order to correct a mistake in the name of a party has the effect of substituting another person as a party, the proceeding shall be taken to have commenced with respect to that person on the day the proceeding commenced.” Subrule (6) provided that the Court may, in specified circumstances, permit the amendment notwithstanding the expiry of any relevant limitation period after the day a proceeding is commenced.

117    A master of the Victorian Supreme Court refused leave for the amendment, and that decision was upheld by a single judge on appeal, and again by the Court of Appeal. Bridge Shipping then appealed to the High Court. There, McHugh J wrote the leading judgment, with which Brennan and Deane JJ agreed. Toohey J and Dawson J each reasoned separately to the same result. The majority of the Court held that r 36.01 covered not only cases of misnomer, clerical error and misdescription but also situations where the plaintiff, intending to sue a person identified by a particular description, was mistaken as to the name of the person who answered that description (at 251 per Toohey J; at 261 per McHugh J; Dawson J dissenting on this point at 242-3).

118    McHugh J reviewed the history of rule 36.01 (at 254-259). His Honour traced the history back to Davies v Elsby Bros Ltd [1961] 1 WLR 170; [1960] 3 All ER 672, in which the UK Court of Appeal held that the plaintiff was not permitted to amend a mistake in the name of the defendant as that would deprive the defendant of the benefit to which he had become entitled under the Statute of Limitations and that the amendment involved the addition of a party and not the mere correction of a misnomer. His Honour noted that the principle in Davies v Elsby was capable of working injustice, and observed that the power to allow amendments to relate back was changed by the promulgation of O 20 r 5 of the Rules of the Supreme Court 1965 (UK) (the English Rules). That rule empowered the Court to allow a plaintiff to amend the writ or a party to amend his or her pleading on such terms as may be just. Sub-rule (3) provided power to correct a genuine mistake in the name of a party where the mistake was not misleading as to the identity of the person intending to sue or, as the case may be, intended to be sued, notwithstanding that the effect of the amendment will be to substitute a new party.

119    McHugh J referred with approval to Evans Constructions Co Ltd v Charrington & Co Ltd [1983] QB 810 (Evans v Charrington) (which was followed in Australia in Lloyd Steel (Aust) Pty Ltd v Jade Shipping SA (1985) 1 NSWLR 212) where the Court of Appeal gave O 20 r 5 of the English Rules a wide meaning.

120    McHugh J concluded (at 259) that, having regard to the history of O 20 r 5 of those rules, it was obvious that sub-rule (3) was intended to overcome decisions such as Davies v Elsby. His Honour said that there is no reason why the Australian counterparts of that rule such as r 36.01 should be given a more restricted meaning. The same can be said of r 8.21(1) and (2) of the Rules of this Court.

121    It was important to McHugh J’s analysis that r 36.01 was remedial in nature. His Honour said (at 260-261):

Rule 36.01(4) is a remedial rule and should be given a beneficial interpretation. It is proper to give it the widest interpretation which its language will permit. It should be interpreted to cover not only cases of misnomer, clerical error and misdescription but also cases where the plaintiff, intending to sue a person he or she identifies by a particular description, was mistaken as to the name of the person who answers that description. In my opinion, Evans v Charrington and Lloyd Steel were correctly decided.

(Emphasis added. Citations omitted.)

Again, the same can be said of r 8.21.

122    Bridge Shipping was unsuccessful in the appeal, but that decision turned on the facts of the case. Bridge Shipping sought to prove, through an affidavit by its solicitor, that Bridge Shipping always intended to sue the owner of the Green Sand, not the carrier. But the High Court found that the mistake Bridge Shipping made was that it mistakenly believed it had rights against the owner of that vessel, which was not a mistake “in the name of a party”, and therefore the appeal was dismissed. That conclusion does not reduce the significance of the principles McHugh J approved.

123    Subsequently, in Brown v Jammal [1995] NSWCA 62, Kirby P (with whom Handley and Sheller JJA agreed) applied Bridge Shipping in the context of Pt 17 R4 of the District Court Rules (NSW). There, the plaintiff suffered injury in a motor vehicle accident in 1986. In 1989 the plaintiff commenced a claim for damages for personal injury in the District Court, doing so against the wrong defendant as a result of the mistake (and serious neglect) of his solicitors. After a change of lawyers, the plaintiff applied in 1994, well after expiry of the applicable limitations period, to substitute the correct defendant on the basis of mistake in the name of a party. The primary judge allowed the amendment to relate back to the commencement of the proceeding. The newly joined defendant appealed to the Court of Appeal.

124    Kirby P noted (at 7) that rules of the kind in Pt 17 R4 were brought in “to overcome the perceived injustice of that holding [in Weldon v Neale] and to substitute a general discretion to allow an amendment, notwithstanding that it raises a statute-barred cause of action against the nominated part, where justice so requires”. His Honour said that the rule must be given a broad construction compatible with its beneficial purposes. In relation to the identification of mistake his Honour said, “it is normal for the Court to consider evidence of the intention of the solicitor or other person who filed the supposedly mistaken document. Thus, the Court will ordinarily examine an affidavit from the solicitor who, if necessary, will be submitted to questioning as to the supposed mistake.” His Honour said (at 10) that the defendant was prejudiced by the delay, although not to the extent asserted, and upheld the decision below.

125    A few years later, in Nikolay Malakov Shipping Co Ltd v SEAS Sapfor Ltd (1998) 44 NSWLR 371 (Sheller and Cole JJA, Handley JA dissenting) the NSW Court of Appeal applied Bridge Shipping in the context of Pt 20 R 4 of the Supreme Court Rules 1970 (NSW). There, the plaintiff’s solicitors misread a search of Lloyd’s Register for the owner of the ship involved in the relevant breach and included the wrong company as the sole defendant. Cole JA said (at 419) that the case was relevantly “indistinguishable” from Bridge Shipping (except in relation to the particular facts of that case). In upholding the decision to allow the amendment, Sheller JA said:

The exercise by the court of a power to correct such a mistake seems to me to be procedural albeit that the existence of the mistake may have allowed the party to raise a defence for so long as the mistake remained uncorrected. I see no reason why a party should be permitted to rely upon a defence available to it only because of a mistake by the other party’s solicitor of the sort which occurred in the present case, when the Court, which is hearing the proceedings, has the means to correct the mistake and the party added as a result of the correction is in no worse position than if the mistake had not been made in the first place. To refuse such an application allows technicality to prevail over merit, a result the courts should strive to avoid. As McHugh J said in Bridge Shipping Pty Ltd v Grand Shipping SA (at 260-261) of an equivalent provision, it is a remedial rule and should be given a beneficial interpretation.

(Emphasis added.)

126    A number of decisions in this Court have applied the principles in Bridge Shipping to grant leave to add a new party to a proceeding, and to relate that back to the commencement of the proceeding notwithstanding the expiry of the applicable limitations period in the meantime.

127    Environinvest Ltd (in liq) v Former Partnership of Webster, White, Gridley, Nairn, Newman, Peters and Miller [2012] FCA 1307; 208 FCR 376 was a case in which the plaintiff’s solicitors filed a proceeding against the auditor of a company in liquidation, wrongly bringing the case against a corporate entity when the auditor was in fact a partnership. When that error subsequently became clear, after expiry of the applicable limitations period, the plaintiff sought orders to amend to correct that mistake so as to bring the case against the partnership and for the amendment to relate back to the commencement of the proceedings. Gordon J applied the principles in Bridge Shipping and granted leave to Environinvest to correct the identity of a party to the proceeding under r 8.21(1)(d).

128    Regarding the date from which the amendment should take effect, her Honour explained the operation of r 8.21(2) as follows (at [29]):

… Put simply, r 8.21(2) expressly provides that amendments made under, inter alia, r 8.21(1)(c) or r 8.21(1)(d) can be made notwithstanding the effluxion of a relevant limitation period. Such a result is not surprising. It is not surprising because, consistent with the earlier analysis of “mistake”, such an amendment does not change or alter the substantive basis on which the proceeding was commenced. There was a change in name but that is all - at all relevant times Environinvest intended to commence proceedings against its auditor for the 2005 year. There has been no substantive change in the purpose of the proceedings, the identity of the party intended to be sued, the subject matter of the proceedings or the causes of action pleaded.

(Emphasis added.)

129    This extract, as well as well as the passages extracted from McGraw-Hill (above at [104]) and Bridge Shipping (above at [121]) were also relied upon in Wallace (liquidator), in the matter of Avestra Asset Management Ltd (in Liq) v Dempsey [2021] FCA 1643 (Greenwood J). There, his Honour granted leave for an amendment to the name of the applicant in circumstances where the solicitors for the applicant erroneously commenced a proceeding by the liquidators in their capacity as liquidators, rather than on behalf of the company. His Honour granted leave to amend the identity of the plaintiff, and for those amendments to relate back, notwithstanding that the applicable limitation period had expired by the date the amendment application was filed.

130    There are numerous other cases in which the Court has granted leave for an amendment to substitute a respondent to a proceeding to correct a mistake, and for the amendment to relate back to the commencement of the proceeding, notwithstanding that the claims were said to be statute-barred. The cases show that so long as the requirements of the applicable rule regarding amendment are met, the courts have treated the loss of a potential limitations defence as carrying little weight in the exercise of discretion. That is unsurprising when the applicable Rule expressly authorised the court to allow an amendment to relate back to the commencement of a proceeding, notwithstanding the expiry of the applicable limitations period: see, for example, Brando Aus Holdo Pty Ltd v Shayne as representative of the persons identified in Schedule 1 [2021] NSWSC 998 at [93], [95] (Rees J); Brightwell v RFB Holdings [2003] NSWSC 7; 171 FLR 464 at [67] (Austin J); Alinta 2000 Pty Ltd v Petkov [2012] WASCA 258 at [1]-[8] (Martin CJ); Robinson, in the matter of Reed Constructions Australia Pty Ltd (in liq) v JFK Interiors Australia Pty Ltd [2015] FCA 1500 at [34]-[38] (Farrell J).

The decision in Ethicon Sàrl

131    BHP relies heavily on the decision in Ethicon Sàrl. In this decision the primary judge granted leave for an amendment to the group definition which expanded the class to take effect from the date of commencement of the proceeding in 2012, rather than in 2018 when the amendment was made. The Full Court set aside that order centrally on the basis that there was a need for certainty at all times as to who comprises the class (at [51]). Their Honours said that although it would be “inappropriate to lay down inflexible rules,” the “default position” is that an order under s 33K of the FCA Act to amend the group definition in an originating application, or an equivalent order under s 33ZF to amend the group definition in a pleading, has effect from the time the definition is changed, consistent with the requirements of class certainty (at [52]).

132    Their Honours said (at [49]-[52]):

[49]    The second difficulty is more significant and relates to the inaptness, or at least the limitations of, drawing analogies between aspects of ordinary inter partes litigation and Part IVA procedures. Although s 33ZG provides that nothing in Part IVA affects the Court’s powers under other provisions, Part IVA provides its own bespoke and detailed regime and, in significant respects, the evident purpose of the Part is to displace generally understood procedures: see Wong v Silkfield Pty Ltd [1999] HCA 48; 199 CLR 255 at 260-261 [11] (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ).

[50]    By the amendment of a group definition, a new group member affected is not becoming a party, still less is the group member an existing party seeking to bring a new cause of action arising out of similar circumstances. The legal consequence is that the claim of a new group member, which claim gives rise to at least one substantial issue of law or fact with others, has become subject to the operation of the Part, subject to opt out or declassing. When one recognises that the regime expressly contemplates and provides for the individuality of claims within a group proceeding, what is brought into focus is that an order for amendment, which has the consequence of expanding the group definition, is sui generis and that analogies drawn from other contexts are apt to mislead.

[51]    It is consistent with the scheme introduced by Part IVA and, in particular, the need for there to be certainty as to the persons who comprise the class at all times, that the Group Definition Amendment should have been ordered to take effect from the date of amendment, being the date of filing of the 5FASOC. To adopt that course is consistent with the expansion of the class effected by the earlier Amendment Orders which, unfortunately, were not drawn to the attention of the primary judge in the present context. Apart from anything else, this prevents the topsy turvy notion that someone retrospectively becomes a group member on commencement, when the Court has thus far proceeded on the basis that they are not group members. As a matter of principle, such an approach would avoid the vice of potentially resuscitating causes of action by persons who have never sought to agitate them. It would be odd that by becoming a group member through the augmentation of a class, substantive rights were conferred on a claimant that had been either extinguished or barred by operation of statute and could not otherwise be advanced by that claimant.

[52]    Before leaving this topic it is worth making a further point. Given the suspension of limitations caused by the operation of s 33ZE, the question of inclusion (or, as occurred here, unusually, exclusion) of group members has potentially important consequences on substantive rights. As does the date when any such order is to take effect. Whatever might be the nature of other amendments to a statement of claim, or to relief claimed in an application, attention must be given by parties to the legal consequences of class composition changes. Irrespective as to when other amendments might take effect, the consequences of amendments to group definition can affect the rights of third parties, being the absent group members or proposed group members. Although it would be inappropriate to lay down inflexible rules, the default position is that a s 33K order (or an equivalent order under s 33ZF) has effect from the time the definition is changed, consistent with the requirements of class certainty. It is a sound practice for applicants, in seeking such orders, to deal separately with amendments concerning class composition to assist in avoiding any confusion.

(Emphasis added.)

133    The approach in Ethicon Sàrl was followed in Bill v Northern Land Council [2018] FCA 1823 at [150] (White J); Andrianakis v Uber Technologies (Ruling No 2) [2020] VSC 152 at [27] (Macaulay J) and Capic v Ford Motor Co of Australia Ltd (No 7) [2018] FCA 1631 at [5] (Perram J).

CONSIDERATION: GROUP DEFINITION AMENDMENTS

134    I understood BHP to accept that the Court has power to grant leave for the Group Definition Amendments to be made, and for those amendments to relate back to the date of commencement of the proceeding, but to argue that it would be contrary to authority and an error in the exercise of discretion to do so in the circumstances of this case. Whether or not that be the case, I am satisfied as to power.

135    BHP does not oppose a grant of leave for the Group Definition Amendments, and it is appropriate that leave be granted. The question for decision is whether it is appropriate in the exercise of discretion to grant leave for those amendments to relate back to the commencement of the proceeding.

136    BHP submits that s 33K does not contain an express power to relate back an amendment to an originating application, and that it is this power that guides the exercise of the discretion, rather than r 8.21. That submission ignores the fact that s 33K(4) expressly authorises the Court, when granting leave to amend a group definition under subs (1), to make any other orders it thinks “just”. Depending upon the circumstances in a case it may be “just” to grant leave for the amendment to relate back. Further, the power of the Court to grant leave to amend, or to allow the amendment to relate back, must be exercised in the way that best promotes the Court’s overarching purpose to facilitate the “just” determination of disputes according to law as quickly, inexpensively and efficiently as possible: Caason at [19]. To my mind the interests of justice in the proceeding must guide the exercise of the discretion.

137    Alternatively, if the power to amend the group definition in an originating application and for the amendment to relate back is sourced in r 8.21(2), McGraw-Hill provides that the discretion to allow an amendment to relate back to an earlier date must have regard to the interests of justice in the case and the overarching purpose of the civil practice and procedure provisions under s 37M.

138    Finally, in relation to the discretion to allow the relation-back of an amendment to a group definition in a pleading, s 33ZF expressly provides that an order under that provision may only be made where the Court is satisfied that the order is “appropriate or necessary to the interests of justice in the proceeding”. Again, the interests of justice in the proceeding must guide the exercise of discretion to allow an amendment to relate back.

The applicants’ intention, and the asserted “mistake”

139    The evidence relevant to the applicants’ intention, the intention of their solicitors, and the asserted “mistake” is set out at [33]-[63] above. I noted there that the contemporaneous documents do not establish that the applicants, or MB and PFM, always intended that the proceeding be brought on behalf of all persons who bought BHP Shares during the Relevant Period, without limitation by reference to the trading platform upon which that occurred. The documentary evidence is contradictory and insufficient to support a conclusion either way.

140    However, the documents do not materially reduce the probative value of the unchallenged evidence of Mr Watson, Mr Myers and Ms Lubomirska. I do not accept BHP’s submissions that:

(a)    their evidence in relation to the applicants’ intention, and their own intention, regarding the class that they intended be represented in the proceeding is unpersuasive and should not be accepted;

(b)    their evidence is an inadequate basis upon which to infer that the group definition was worded as it was because of a lawyer’s drafting error. BHP argues, for example, that there is no direct evidence:

(i)    that the words “on the Australian Securities Exchange (ASX), a financial market operated by ASX Limited” and the equivalent words in relation to the LSE and JSE, were included in the group definition by some mistake on the part of the drafter; or

(ii)    as to the drafting choices that were made or of the matters taken into account when the group definition was framed, including that the applicants’ solicitors did not state that they were not aware of the existence of secondary exchanges prior to BHP raising the matter in June 2023, nor as to why that matter was not considered at the time of drafting; and

(c)    the solicitors’ assertions of mistake “sit uncomfortably” with the language of the group definition (with BHP’s reading of the group definition being the “natural way” to read it); and with the fact that the originating application and statement of claim have gone through multiple rounds of amendment without any previous attempt to alter the group definition. Nor do I accept that the introduction of the Loss Amendments confirms that the existence of secondary trading platforms is something to which the applicants’ lawyers have only belatedly turned their minds;

141    First, the evidence of Mr Watson, Mr Myers and Ms Lubomirska strongly supports the applicants’ contention that they, and their solicitors, always intended that the proceeding be brought on behalf of all persons who bought BHP Shares during the Relevant Period, without limitation by reference to the exchange or trading platform upon which that occurred. It was open to BHP to cross-examine them, and it chose not to do so.

142    In my view it is appropriate to infer that BHP made a “calculated forensic” choice in that regard: Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 243 CLR 361 at [74] (Heydon, Crennan and Bell JJ). BHP elected not to cross-examine, and instead decided to advance arguments aimed at reducing the probative weight of the applicants’ solicitors’ evidence. In Kuhl the plurality explained:

If evidence in chief is thought to be too feeble to serve its purpose, cross-examiners often think it best to leave it alone, for to cross-examine will do no more than strengthen it: the repeated questions may cause the witness to think harder, may cause the witness to become more determined, may trigger better recollection and may result in the witness giving the more detailed evidence which was not given in chief. But decisions by cross-examiners of that kind are gambles, and the gambles can be lost.

143    BHP lost that gamble. As a general proposition, unchallenged evidence ought be accepted unless it is inherently incredible or contradicted by facts otherwise established on the evidence: Precision Plastics Pty Ltd v Demir [1975] HCA 27; 132 CLR 362 at 370-371 (Gibbs J, with whom Stephen and Murphy JJ agreed). The “rule” in Browne v Dunn (1893) 6 R 67 requires that a party who intends to invite the court to disbelieve an opposing witness put to the witness in cross-examination the grounds upon which the evidence is to be disbelieved. That is not, however, to suggest that there is any rule that a Court must accept unchallenged evidence: Ashby v Slipper [2014] FCAFC 15; 219 FCR 322 at [74]-[78] (Mansfield and Gilmour JJ). That is not the case.

144    Here, there is nothing inherently incredible about the evidence of Mr Watson, Mr Myers and Ms Lubomirska. Indeed, I found their evidence credible. Nor is there evidence contradicted by facts otherwise established. The contemporaneous documents are inconclusive, and contradictory. Nor do the particular circumstances of the case point to its rejection. In my view their evidence has real probative weight.

145    Second, I accept that the meaning of the group definition reached in Impiombato No 4 is the natural way to read it, but that does little more than restate the lawyers’ drafting error upon which the applicants rely. BHP did not stoop to expressly contend that the evidence of Mr Watson, Mr Myers and Ms Lubomirska as to the intention of the applicants and their solicitors was untruthful, but its submissions had that flavour. The general rule that unchallenged evidence should be accepted (with the qualifications expressed above) applies a fortiori when the suggestion of untruthfulness is made in relation to a solicitor’s evidence. Such a suggestion in relation to a solicitor is a serious matter, and if BHP wished to suggest that, it should have cross-examined the solicitors: Browne v Dunn; Ashby v Slipper at [141]-[142] (Mansfield and Gilmour JJ). BHP’s forensic choice not to cross examine any of the solicitors who went into evidence constrained the submissions which BHP could properly put, and it did not have a proper basis for any suggestion that their evidence was untrue.

146    Third, BHP submits that there is no direct evidence as to the drafting error. There are several aspects to this submission. First, BHP submits that the applicants themselves should have gone on affidavit. I do not accept that it was necessary for the applicants to personally go into evidence. In a large and complex class case like this, it is appropriate to infer that the applicants played no part in the drafting of the application or statement of claim, and the evidence indicates that the drafting error was by the applicants’ lawyers rather than by the applicants themselves. Further, the authorities in relation to amendment to correct a mistake show that such a mistake can be established by a solicitor’s affidavit: see Bridge Shipping, Environinvest, Wallace and Jammal. In Jammal (at 7) Kirby P said that “the court will ordinarily examine an affidavit from the solicitor who, if necessary, will be submitted to questioning as to the supposed mistake.”

147    Then, BHP submits that the appropriate solicitors, Ms Dellavedova at MB and Mr Phi at PFM, did not go on affidavit. I am not persuaded that it was necessary for the applicants to adduce evidence from Ms Dellavedova when she is no longer employed at that firm, and Mr Watson was at all material times the head of MB’s class actions division. He was in a sufficient position to give evidence as to MB’s intention, supported as his evidence was by the evidence of Ms Lubomirska on information and belief from Mr Webb. And in relation to PFM, there is nothing to show that Mr Myers was not involved in the case from the outset, and little to show that he was not an appropriate person to give the evidence that he did.

148    Next, BHP submits that the evidence is inadequate because there is no direct evidence as to the drafting choices that were made by the applicants’ solicitors or of the matters they took into account when drafting the group definition, including the extent to which they considered the existence of other platforms. I do not accept that for the following reasons.

(a)    Mr Myers gave unchallenged evidence that the applicants’ lawyers made an “inadvertent mistake in drafting”, and in my view that is sufficient. Had BHP wished to cross-examine him on that evidence, it could have done so;

(b)    in any event, it was not necessary for the applicants to adduce such evidence. A similar argument was rejected in Wallace. Greenwood J did not accept the submission that the plaintiff’s solicitor’s affidavit did not establish the asserted “mistake” based on contentions that (i) the plaintiff’s solicitor was unable to explain how that mistake occurred and (ii) there must be someone in the plaintiff’s camp to explain how it came to be that the proceeding was brought in the wrong name. The defendant had argued that the Court should not infer a mistake was made when someone could presumably have given direct evidence of it, but had not (at [59]). His Honour held that it was “perfectly plain” having regard to the objective facts that there was a “clear and operative mistake” in that the proceeding was intended to be commenced in the name of the company, but it was not, and it was clear from the material that the solicitors made a mistake “in the sense that they believed that the action was properly constituted by adopting the textual language as appears on the document.” I take a similar view here;

(c)    further, it is unlikely to have been as straight forward as BHP’s submission suggests to establish the asserted drafting error by “direct evidence” as to how the mistake occurred. In a case of this size and complexity, the group definition in the draft originating application and statement of claim are likely to have gone through the hands of junior lawyers, a senior associate and a partner in the offices of PFM and of MB, and to have been either drawn or settled by senior and junior counsel. The drafting error is likely to have had many parents, and I do not accept that it was necessary for the applicants to establish exactly how the mistake occurred; and

(d)    finally, how the drafting mistake occurred is sufficiently clear in any event. Mr Myers stated, and I accept, that he understood the references to the ASX, LSE and JSE in the group definition and other parts of the pleadings to reflect the dual listed structure of BHP Ltd and BHP Plc, and he did not understand them to introduce any limitation or restriction in the group definition such that a person’s acquisition of an interest in BHP Shares had to occur through trading on those exchanges. On the basis of information and belief from Ms Lubomirska and Mr Koo he said they had the same understanding. That understanding was erroneous. That is a sufficient explanation of the lawyers’ drafting error in framing the group definition.

149    Fourth, my view regarding the sufficiency of the applicants’ evidence of intention is buttressed by the evidence of Mr Watson and Mr Myers that there was no good reason for them to introduce a limitation into the group definition by reference to the share trading platform upon which BHP Shares were acquired. I accept that evidence. To my knowledge, until this case, there has never been an Australian securities class action in which the applicant limited the group definition in respect of shares quoted on the ASX by reference to the trading platform upon which the share trades were executed. That is for good reason. Any such limitation would be likely to introduce unnecessary uncertainty and complexity into a group definition; give rise to a need to undertake factually intensive enquiries by persons to ascertain whether or not they are group members; and to create difficulties in establishing who is, in fact, a group member. Such difficulties and uncertainty are quite undesirable in a proceeding under Part IVA, and I can see no logical reason for law firms experienced in securities class actions like MB and PFM to have deliberately drafted the group definition with such a limitation.

150    I note that is different view to the view Moshinsky J took in Impiombato No 4 (at [26]). His Honour concluded that, having regard to the causation pleading, there appeared to be a logic to defining the class by reference to acquisition of the relevant shares on the ASX, the LSE or the JSE. In my view the causation pleading is grounded in the proposition that the price of shares on one exchange was influenced by material information concerning BHP which was disclosed on the other exchanges. I do not consider that required that group membership be defined by reference to the acquisition of shares on either the ASX, the LSE or the JSE.

151    I am satisfied on the evidence that at all material times the intention of the first and second applicants, and also of MB and PFM, was to bring the proceeding on behalf of all persons who acquired an interest in BHP Shares during the Relevant Period, irrespective of the trading platform upon which that occurred. I accept Mr Myers’ evidence that the framing of the group definition in the way that it is was an “inadvertent mistake in drafting”. The operative mistake was the applicants’ lawyers inadvertently framing the group definition in a way which was inconsistent with the applicants’ intention, and indeed the solicitors’ own intention. The applicants’ lawyers should have ensured that the group definition accorded with their clients’ understanding of the case to be brought, and they did not.

The prejudice to the Excluded Shareholders

152    The evidence relevant to the prejudice likely to be suffered by the Excluded Shareholders is set out at [66] to [68] above. The applicants contend that the Excluded Shareholders are likely to suffer two types of prejudice unless leave is granted for the Group Definition Amendments to relate back to the commencement of the proceeding:

(a)    first, they will be unable to benefit from the proceeding, including by obtaining a benefit from any settlement or judgment in favour of the applicant and group members; and

(b)    second, they will have had reasonable grounds to believe that they were group members in the proceeding and therefore will not have taken any steps to preserve their rights against the Respondent outside of the Proceeding and/or the prior competing proceedings. Having regard to the applicable limitation periods there is a real risk that BHP will raise a limitations defence to any claim brought by the Excluded Shareholders to seek to vindicate their rights.

153    In relation to the first type of asserted prejudice, BHP is correct in contending that it is axiomatic that persons who lie outside the group definition cannot take advantage of any settlement or judgment in the proceeding. And, like BHP, I would not describe that result as an injustice. It is a function of the ordinary operation of the Part IVA scheme.

154    But here the Excluded Shareholders fall outside the group definition because of a lawyer’s drafting error in the group definition. Contrary to BHP’s submissions I do not consider the exclusion to be a function of the operation of the Part IVA scheme and the public policy underpinning limitation periods, nor a mere continuation of the status quo ante that cannot properly be considered truly prejudicial. It is a function of the lawyers’ drafting error. As a result of that mistake, the Excluded Shareholders will be disadvantaged relative to the group members, because the Excluded Shareholders will not be entitled to share in the benefit of any favourable settlement or judgment. That relative disadvantage is a relevant prejudice.

155    I have, however, concluded that this prejudice does not carry substantial weight in the exercise of the discretion. The Excluded Shareholders are not, and never have been, group members in the proceeding, and the prejudice they will suffer is not central to my decision. Centrally, the prejudice which has moved me to grant leave for the Group Definition Amendments to relate back is the prejudice likely to be suffered by existing group members.

156    In relation to the second type of asserted prejudice likely to be suffered by the Excluded Shareholders, I can accept that it may be that some persons had reasonable grounds to believe that they were group members and may not therefore have taken any steps to preserve their rights against BHP outside of the proceeding, and that they might therefore be prejudiced. But whether or not a person had reasonable grounds to believe that they were a group member will depend upon the contemporaneous documents they perused, including the version of the MB or PFM website which they looked at, together with any communications they had by email or telephone with MB or PFM at the time. Some versions of the websites and contemporaneous documents may have given that impression and others are unlikely to have done so. The Excluded Shareholders who perused communications from one or other of the applicants’ solicitors and who read their websites will have understood different things at different times. The contemporaneous documents are contradictory and, in the absence of evidence by the Excluded Shareholder as to what they read and when they read it, or what other communications they had, I am not satisfied that the Excluded Shareholders had reasonable grounds to believe they were group members.

157    Mr Myers' evidence was to the effect that reasonable grounds existed for Excluded Shareholders to believe they were group members, and that they may not have taken any steps to preserve their rights against BHP outside of the proceeding. But the applicants did not adduce evidence from any Excluded Shareholder that he or she in fact held such a belief, and Mr Myers’ evidence in this regard is speculative. And it is speculative in circumstances where the evidence shows that, as at 25 October 2018, approximately 30,000 BHP shareholders had retained either PFM or MB to act for them in the case.

158    Given the number of group members who are clients of PFM or MB, it is surprising (BHP describes it as illuminating) that the applicants did not adduce evidence from a single person to the effect that:

(a)    they believed that they were group members in the proceeding and, for that reason, they did not take any steps to vindicate or preserve their rights against BHP outside of the proceeding; or

(b)    had they known they were outside of the class in the proceeding they would have taken steps to vindicate their rights against BHP through an individual proceeding or a competing representative proceeding.

The speculative basis for this asserted prejudice means that it is appropriate to accord it little weight in the exercise of the discretion to allow the amendments to relate back.

159    Finally, I do not accept BHP’s contention that the applicants and their solicitors had no relevant interest in seeking the Group Definition Amendments because the amendments will benefit only the Excluded Shareholders, who are not and never have been group members, and the litigation funder whose interests are irrelevant. While BHP did not stoop to make this contention expressly, its submissions carried the suggestion that the applicants’ solicitors were acting improperly by putting the litigation funder’s interests ahead of the interests of group members, and/or by putting the interests of Excluded Shareholders (who are not group members) ahead of the interest of those who are group members.

160    This submission ignores the fact that the thrust of the evidence of Mr Watson, Mr Myers and Ms Lubomirska was that at all times the applicants and MB and PFM had intended that the Excluded Shareholders be included in the class, and until the decision in Impiombato No 4 they had understood that the Excluded Shareholders were group members. I can see no impropriety in their seeking to correct a lawyers’ drafting error which meant that the group definition did not reflect their instructions. Further, if BHP wanted to suggest that the applicants’ solicitors were acting improperly in bringing the application it should have cross-examined Mr Watson, Mr Myers or Ms Lubomirska. It elected not to do so, and it should not have made this submission without a proper basis.

The prejudice to existing group members

161    The evidence and findings relevant to the prejudice to existing group members are set out at [69] to [90] above. In my view existing group members are likely to suffer significant prejudice if the Group Definition Amendments are not permitted to relate back to the commencement of the proceeding.

162    First, it must be understood (and it is uncontroversial) that the share registers for BHP Ltd and BHP Plc show the trades in ordinary BHP Shares during the Relevant Period, but do not record the trading platform on which the trades occurred. Ascertaining the trading platform used to execute a share acquisition cannot be determined by reference to share registry data.

163    Second, Mr Myers gave unchallenged evidence that in his experience, most retail investors execute market trade through brokers, including online brokers, and do not provide instructions as to the trading platform upon which their trade is to be executed, and also that most brokers do not provide retail investors with details of the trade platform used to execute a trade. I accept that evidence. It does not matter whether Mr Myers is correct in stating that in relation to “most” retail investors in BHP Shares; it is enough if that is the position for “many” such persons.

164    It is therefore likely that many existing group members who acquired BHP Shares through a broker during the Relevant Period will not be in possession of information as to the trading platform upon which the shares were acquired. In order to ascertain the trading platform upon which the shares were acquired they will need to seek that information from their broker.

165    Third, I accept Ms Tran's evidence that an existing group member may know the trading platform upon which BHP Shares were acquired on their behalf during the Relevant Period because of the instructions they gave to their dealer/broker. But for many existing group members I consider that is unlikely to be the case, because:

(a)    the evidence is that most retail investors do not provide instructions as to the exchange or trading platform upon which a share trade is to be executed. It is likely that many group members have little interest in the exchange or trading platform upon which a relevant share trade is to be executed by their broker; their interest is in the share trade rather than the platform. It is likely that many existing group members did not provide instructions to their broker as to the exchange or trading platform upon which the broker was to acquire BHP Shares during the Relevant Period;

(b)    for those group members who did provide instructions to their brokers as to the trading platform upon which to execute the share trade, once the share trade was executed it is likely that many such group members did not retain those instructions as there would be no good reason to keep them. For those group members who did retain those instructions, it is likely that many of them will no longer have records of instructions they gave between approximately 8½ to 11 years ago.

166    Fourth, because it is likely that many existing group members do not have records of any instructions they gave brokers regarding the platform or exchange upon which to execute a trade in BHP Shares during the Relevant Period, in order for them to establish that they are in fact group members it will be necessary them to make enquiries of their brokers to identify the trading platforms on which the relevant share trades were executed.

167    Mr Betts deposed that 14.5 billion BHP Shares were traded on the ASX, LSE and JSE during the Relevant Period. He did so by reference to generalised market data, which I infer does not permit determination as to the exchange upon which a particular trade was conducted. If brokers have retained some relevant share transaction records from that period, having regard to the sheer number of share transactions during the period, the enquiries of brokers to establish that each of those acquisitions was, in fact, on either the ASX, LSE or JSE will be factually intensive, time-consuming, expensive (in aggregate) and likely to take a substantial period of time. In aggregate, the time and cost of such enquiries is likely to be enormous.

168    Fifth, I accept Ms Tran's evidence that brokers might not have access to multiple trading platforms, and therefore it may not be time-consuming or burdensome to establish the exchange or trading platform upon which those brokers acquired BHP Shares during the Relevant Period. But Mr Myers’ evidence shows that during the Relevant Period all but one of the major Australian retail brokers had access to multiple trading platforms, and in my view the same is likely to be true of major overseas retail brokers. Further, Mr Blundell stated that investment banks had access to multiple trading platforms, and that those who can access multiple trading platforms have algorithms that allow them to execute orders across multiple platforms at the same time.

169    The evidence is that approximately 14.5 billion BHP Shares were traded on the ASX, LSE and JSE during the Relevant Period, and that approximately 3.3 billion BHP Shares were traded on secondary platforms during that period. The likely usage of multiple trading platforms by major Australian retail brokers, major overseas retail brokers and investment banks means that it is likely that many existing group members had BHP Shares acquired for them during the Relevant Period on secondary platforms. It is likely to be necessary for many existing group members to undertake factually intensive, time-consuming and costly enquiries to establish that they are, in fact, a group member. The persons presently treated as existing group members will be required to undertake those enquiries in order to register in any group member registration process, and in order to establish their entitlement to share in any favourable settlement or judgment. The persons presently treated as Excluded Shareholders will be required to undertake those enquiries in order to ascertain whether BHP Shares were also acquired on their behalf on the ASX, LSE or JSE during the Relevant Period, such that they are, in fact, existing group members.

170    Sixth, the evidence shows that, pursuant to the applicable exchange rules, brokers are required to keep share transaction records for the following periods:

(a)    on the ASX and on Chi-X Australia, for seven years;

(b)    on Chi-X Europe and on the JSE, for five years (and in relation to client instructions on the JSE, for six months); and

(c)    on the LSE, for three years.

171    The Relevant Period in this case is 8 August 2012 to 9 November 2015. Therefore, in relation to records of share transactions undertaken:

(a)    on the ASX and on Chi-X Australia, it is now approximately 1½ to 4½ years after the expiry of the required seven year period under the applicable rules;

(b)    in Europe and on the JSE, it is now approximately 3½ to 6½ years after the expiry of the required five year period under the applicable rules. In relation to client instruction records on the JSE, it is now approximately 8 years to 11 years after the expiry of the relevant six-month period for such records; and

(c)    on the LSE, it is now approximately 5½ to 8½ years after the expiry of the required three year period under the applicable rules.

172    I accept Ms Tran's evidence that a group member’s broker may continue to hold its electronic records of share trades after the expiry of the periods provided under the applicable rules, but in my view it is likely that many brokers will not have done so. Mr Myers’ evidence shows that the major Australian retail brokers are required, pursuant to their own privacy policies, to delete all personal information records as soon that information is no longer required. It is likely that many brokers will destroy their share transaction records as soon as they are lawfully able to do so, as that is what their privacy policies require. Having regard to that, and also to the likely costs associated with retention of share transaction data over a lengthy period, I consider it likely that many major Australian retail brokers will not have retained their share transaction records beyond the required seven-year period under the ASX Rules.

173    For similar reasons, having regard to the requirements under the LSE Rules, the JSE and the BATS Europe Rules for the retention of share transaction records, together with the likelihood that brokers operating on those overseas exchanges also operate under similar privacy policies, it is likely that many major overseas brokers will not have retained their share transaction records beyond the three-year period required under the LSE Rules or the five-year period required under the BATS Europe Rules and JSE Rules.

174    If, as I consider to be likely, many brokers no longer have share transaction records which record the exchange or trading platform upon which BHP Shares were acquired on their behalf during the Relevant Period, I consider that many existing group members are likely to face substantial difficulty in establishing that they are, in fact, group members. In my view, for many existing group members, it is likely to prove impossible to establish that.

175    Seventh, the likelihood that many existing group members will face substantial difficulty in establishing that the BHP Shares acquired on their behalf during the Relevant Period were, in fact, acquired on the ASX, LSE or JSE, and that for many group members it will be impossible to establish that, means that there is likely to be significantly added complexity in relation to opt out and any group member registration process, which in turn is likely to lead to further cost and further delay in the proceeding.

176    In Impiombato No 4 at [6] Moshinsky J said, and I agree, that “it is important…that the opt-out notice state with clarity who is covered by the group member definition, so that persons know whether they are covered and therefore whether they need to make a decision about opting out”. Under the group definition as it currently stands, many group members will be required to undertake factually intensive, time-consuming, and (in aggregate) costly enquiries to ascertain the exchange or trading platforms upon which interests in BHP Shares were acquired on their behalf, in order to decide whether to opt out, and to do so in a timely way. And for many existing group members it is likely to be impossible to establish that they are, in fact, group members. That is antithetical to the Pt IVA regime.

177    Further, if, as is usual in securities class actions, orders for group member registration are made for the purposes of facilitating settlement, many group members are likely to be required to undertake factually intensive, time-consuming, and (in aggregate) costly enquiries to ascertain the exchange or trading platforms upon which interests in BHP Shares were acquired on their behalf, in order to register so as to participate in any settlement, and to do so in a timely way. And for many existing group members it is likely to prove impossible to establish that. It is likely to make any registration process significantly more cumbersome and expensive, and to cause substantial delay. And for those group members who cannot establish which exchange or trading platform upon which BHP Shares were acquired on their behalf, they are likely to be unable to participate in any settlement.

178    BHP submits that, even if leave is granted for the Group Definition Amendments, group members will still need to identify the relevant contract and the relevant interest which they acquired, which could be a beneficial interest such that the group member’s name may not appear on the share register. I accept that, but the difficulties associated with that are not comparable with the difficulties, perhaps impossibility, associated with establishing the trading platform or exchange upon which an acquisition of BHP Shares was made approximately 9 to 12 years ago.

179    Nor do I accept BHP’s submission that the practical complexities associated with the group definition are merely abstract. It argues that they will only arise in a practical way if compensation is awarded, whether by settlement or judgment. It relies upon Ms Tran’s evidence that in her experience:

(a)    concerns regarding the level of detail or quality of eligibility or loss information of group members do not frustrate the orderly conduct of the proceedings through the initial trial of the common issues; and

(b)    in other class actions, courts and class action practitioners have had to, and have been able to, deal with variability in eligibility and loss information provided by group members.

It contends that the issues raised by the applicants are not novel or unique to the present proceeding, nor are they insurmountable, or even particularly difficult or unusual.

180    First, the difficulties likely to be associated with the group definition as presently pleaded cause practical difficulties well before settlement or judgment. As I have said, existing group members will be required to undertake factually intensive, time-consuming, and (in aggregate) costly enquiries to establish the exchange or trading platforms upon which BHP Shares were acquired on their behalf in order to decide whether to opt out, and in order to decide whether to register in any group member registration process. And that requirement is likely to make any registration process significantly more cumbersome and expensive, and to cause substantial delay. Second, the parties’ estimates as potential aggregate liability are likely to be important in settlement negotiations and uncertainty as to whether persons who are, in fact, group members can establish that is likely to make the case substantially more difficult to settle. Third, BHP’s contention that other class actions have been forced to manage uncertainty as to eligibility or loss information misses the point. Here, the applicants seek orders to reduce the uncertainty that arises in this class action because of a drafting error.

The prejudice to BHP

181    The evidence in relation to prejudice to BHP is set out at [91]-[96] above. BHP contends that, if leave is granted for the Group Definition Amendments to relate back to the commencement of the proceeding, it will suffer two species of prejudice, because:

(a)    introducing the Excluded Shareholders into the class will substantially increase the securities which are alleged to give rise to the alleged losses, and will substantially increase BHP’s aggregate potential liability in the class action; and

(b)    BHP will be denied the ability to raise limitations defences against the claims of the group members in the expanded class to the extent that they acquired securities other than on the ASX, LSE and JSE. BHP says that it is evident from Mr Myers’ evidence that the intention of the Group Definition Amendments is to effect the expansion of the class, and for that expansion to circumvent limitation defences. It contends that the effect of this would be to visit BHP with the consequences of the error made by the applicants and/or their lawyers.

182    In relation to the first species of prejudice, I accept that inclusion of Excluded Shareholders’ claims is likely to increase BHP’s potential aggregate liability in the proceeding. I am not, however, persuaded that the increase in BHP’s potential liability will be as substantial as it suggests, nor that the prejudice to BHP will be as great as it submits. Nor does the evidence establish that the increase in BHP’s potential liability will be material having regard to the substantial quantum of the claims already made in the proceeding.

183    Mr Betts deposed that a total of approximately 14.5 billion BHP Shares were traded on the ASX, LSE and JSE during the Relevant Period. And Ms Tran’s evidence shows that approximately 3.3 billion BHP Shares were traded on secondary platforms during the same period. The addition of a further 3.3 billion BHP Shares into the scope of the proceeding might be argued to show an approximately 22.8% increase in the size of the class (3.3 billion of 14.5 billion acquisitions), but such an approach would be simplistic.

184    I say that, first, because Ms Tran’s evidence does not establish the approximate potential aggregate value of Excluded Shareholders’ claims. The likely increase in potential aggregate claim value is unknown.

185    Second, and more fundamentally, that simplistic approach does not take into account that a person who is a group member (because they acquired BHP Shares on either the ASX, LSE or JSE during the Relevant Period) is also a group member in respect to any acquisition of BHP Shares on other exchanges or trading platforms during that period. Mr Myers’ evidence shows that during the Relevant Period all but one of the major Australian retail brokers had access to multiple trading platforms, and that is also likely to be true of major overseas retail brokers. And Mr Blundell said that investment banks had access to multiple trading platforms, and that those who can access multiple trading platforms have algorithms that allow them to execute orders across multiple platforms at the same time.

186    Having regard to the likely usage of multiple trading platforms by major Australian and overseas retail brokers and by investment banks during the Relevant Period, it seems likely that many of the 3.3 billion BHP Shares that were acquired on secondary platforms during the Relevant Period were acquired on behalf of persons who are existing group members. If that is the case, the expansion in the class and the resultant prejudice to BHP is likely to be significantly less substantial than its submissions suggest. As I later explain, I consider it to be plain that existing group members should have leave under r 16.53 to claim any further losses they have suffered through the acquisition of further BHP Shares on secondary trading platforms.

187    Third, the claims of existing group members (brought in respect of the acquisition of 14.5 billion BHP Shares during the Relevant Period plus any increase in that because some of the 3.3 billion shares acquired on secondary platforms were acquired by or on behalf of existing group members) are already very large. The evidence does not establish that the inclusion of Excluded Shareholders' claims will be material having regard to group members’ claims that are already on foot.

188    Fourth, BHP did not adduce evidence or make submissions to show that had it known of its potential increased exposure to claims, it would have taken a different approach in the litigation or to settlement. For example, there is no evidence of any settlement negotiations having taken place between the parties based on the Excluded Shareholders’ claims being outside of the claims in the proceeding.

189    Weighing everything in the balance, I accept that BHP is likely to suffer some prejudice, but in my view it is unlikely to be material in the context of the case. Nor will BHP’s position be any worse by allowing the Group Definition Amendments than if the drafting error in the group definition had not been made in the first place: Nikolay Malakhov at 395 (Sheller JA).

190    In relation to the second species of asserted prejudice, I note the following.

191    First, BHP will not, in terms, be denied the ability to raise limitations defences if the Group Definition Amendments are permitted to relate back to the commencement the proceeding. It will remain able to plead any limitations defences it has: Environinvest at [34] citing Australian Iron & Steel at 488. The parties did not seek determination of whether, absent relation-back of the amendments, the Excluded Shareholders’ claims are or would be statute-barred by operation of the applicable limitations periods, and it is usually inappropriate to make such a finding at an interlocutory stage: Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 533. Having said that, I accept that permitting the amendments to relate back will mean that BHP will likely lose the benefit of limitation defences it may have had against the Excluded Group Members absent relation back.

192    Second, the limitation periods applicable to the applicants’ claims are six years: see s 1041I(2) of the Corporations Act in relation to claims under s 1041I(1); s 1317K in relation to claims under s 1317HA; and s 1325(4) in respect of claims under s 1325 (claims based on s 674 are brought via ss 1317HA and s 1325). On its face s 1322(4)(d) empowers the Court to make an order extending the period for instituting or taking any proceeding under the Act, including an order extending a period where the period in question ended before the application was made. However, different judicial views have been expressed as to when s 1322(4) may be invoked: see eg, Karl Suleman Enterprizes Pty Ltd (in liquidation) v Pham [2013] NSWSC 110 at [113]-[114] (Beech-Jones J); Austructures Pty Ltd v Makin [2014] VSC 544; 290 FLR 153 (Almond J); Binqld Finances Pty Ltd (in liq) v Binetter [2024] FCA 361 (Kennett J). For the purposes of this application it is unnecessary to decide whether, if the Group Definition Amendments are not permitted to relate back, an order under s 1322(4) would be made. It is enough to note the possibility that the limitation periods applicable to Excluded Shareholders’ claims may be extended by an exercise of the Court’s discretion under s 1322(4)(d), whether or not relation back is permitted.