Federal Court of Australia

Bupa Aged Care Australia Pty Ltd v Cochrane as Executor of the Estate of Mudie [2026] FCA 181

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal be dismissed with costs.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

A    INTRODUCTION

1    The applicant, Bupa Aged Care Australia Pty Ltd (Bupa), seeks leave to appeal from orders of the primary judge dismissing Bupa’s application by way of an amended interlocutory application dated 8 October 2025 for summary dismissal under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and r 26.01(1) of the Federal Court Rules 2011 (Cth) (FCR), or alternatively to “strike out or summarily dismiss” the amended statement of claim under FCR 16.21 (Cochrane v Bupa Aged Care Australia Pty Ltd [2025] FCA 1560).

B    PRINCIPLES GOVERNING LEAVE TO APPEAL

2    The principles are uncontroversial and can be briefly stated. Leave to appeal from an interlocutory judgment will ordinarily be granted only when the decision is attended with sufficient doubt to warrant reconsideration and substantial injustice would result if leave were refused. Those considerations are cumulative and interrelated. Further, where the impugned order or orders involve the exercise of a discretion, it must be shown there was an arguable error of a kind described in House v The King [1936] HCA 40; (1936) 55 CLR 499.

3    The assessment of “sufficient doubt” is conducted at a reasonably impressionistic level so as to avoid turning the leave application into a premature merits appeal. Echoing the sage and enduring wisdom of the great Sir Frederick Jordan (which seems not to have stopped an apparent increase in appeals involving evidentiary or practice and procedure decisions), it should be regarded as well-established that particular restraint is to be exercised in relation to such applications for leave.

C    BACKGROUND AND NATURE OF THE CLAIM

4    The proceeding is brought as a class action under Pt IVA of the FCA Act.

5    The respondents (applicants below) allege that Bupa systemically understaffed certain aged care homes. It is alleged that the understaffing constituted a breach of various resident agreements and also a contravention of statutory consumer guarantees (that is, the care and skill guarantee under s 60 of the Competition and Consumer Act 2010 (Cth) Sch 2 (ACL) and the fitness for purpose guarantee under s 61 of the ACL).

6    Put broadly, the pleaded contract case is that the resident agreements required Bupa to provide “safe and high-quality care and services”, and that the content of that obligation is to be understood by reference to the aged care legislative regime. The respondents allege (at ASOC [26]) that Bupa was required to maintain and roster an adequate number of appropriately skilled staff (including registered nurses) to provide an adequate number of direct-care staff minutes (including minutes provided by nurses) on average across each Bupa care home.

7    It is further alleged that where a home failed to meet the minute-based threshold, Bupa breached its obligations to each resident in that home. That is, the minute-based staffing arrangement constitutes the content of the contractual obligation to provide safe and quality healthcare.

8    Damages are pleaded on what Bupa characterises as a “pro rata” model calculated by reference to the difference between the value of care minutes said to have been required across the home and the value of minutes actually provided, apportioned across residents.

9    I will come back to the damages case below.

10    Bupa contends that this case does not disclose a reasonable cause of action with a reasonable prospect of success. It submits that a quality of contractual obligation cannot be breached by proof of a purely quantitative facility-wide metric divorced from the care actually received by an individual resident. Put another way, it cannot be right that Bupa was in breach if a particular Bupa care home fell short of a care minutes target, without any regard to the safety and quality of care in fact provided to the individual resident. Bupa also contends the damages theory is internally inconsistent and untethered from individual loss.

11    As would already be evident, the primary judge rejected Bupa’s submission that the respondent’s case was as characterised by Bupa and declined to dismiss it summarily or strike it out.

D    SUBSTANTIAL INJUSTICE

12    It is convenient to address initially the second limb of the applicable test.

13    Bupa submits that substantial injustice will result if leave is refused, because it will be required to defend a complex representative proceeding, including significant costs and a management burden, notwithstanding the proceeding should have been terminated summarily.

14    I do not accept that submission.

15    Ordinarily, of course, this sort of asserted prejudice has not generally been regarded as substantial prejudice for the purposes of the test. It merely is the ordinary result of the vicissitudes and incidents of litigation. This is far from the sort of case where the impugned judgment adversely determines substantive rights of the applicant for leave.

16    Having made this point, I did raise during argument whether characterisation of prejudice as less than substantial (because the asserted prejudice is an ordinary incident of litigation) has less force in the context of class actions than it does in ordinary inter partes litigation. I raised this point because it is notorious that these are large and often unwieldy pieces of litigation where there is often a disproportionate burden on the respondent to the class action to spend very large amounts of money, including in complying with discovery obligations.

17    I have previously remarked elsewhere about the common pattern in class actions for an embryonic case theory to be transmogrified following the inspection of discovered documents: see R&B Investments Pty Ltd v Blue Sky Alternative Investments Ltd (in liq) (Separation of Issues) [2025] FCA 1097 (at [5]–[6] per Lee J). There is nothing necessarily inappropriate about this, but it does reflect the fact that litigation of this type can involve disproportionate cost between the parties.

18    Having taken this into account, however, the barrier for leave is described as requiring substantial prejudice for a reason. The reality is that Bupa retains all its substantive defences at trial and, if necessary, on appeal from any final judgment.

19    Further, Bupa proceeded with this application on the premise that the relief it sought was to obtain the summary dismissal of what has been described as the “common claims”. But, in the circumstances of this case, this is incorrect. Section 33ZB of the FCA Act provides that a judgment in a representative proceeding binds all group members other than those who have opted out under s 33J.

20    By reason of s 4 of the FCA Act, “judgment” includes interlocutory judgments, including an order for summary dismissal. This is the legislative mechanism providing for the extension of the effect of orders beyond the parties and their privies to binding strangers to the litigation to the orders by way of a “statutory estoppel”. Absent some novel and hitherto unarticulated development based on equitable principles of preclusion, this is the only way group members are bound.

21    In this proceeding, there has been no opt out under s 33J. The statutory scheme contemplates that, absent opt out, group members’ claims remain within and subject to the representative framework.

22    As I have explained, more than once, once a claim has passed through the s 33C gateway, it always remains subject to the Pt IVA regime unless and until there is opt out, or it is resolved by court-approved settlement, or by judicial determination of common issues (with binding effect under s 33ZB), or individual determination at an initial trial or other hearing prior to any declassing. Absent seeking any order binding non-party group members under s 33ZB, which was not sought here, it is not correct to proceed as though the summary dismissal order sought would have somehow quelled the claims (to use that word in its statutory sense) as between Bupa and the group members.

23    If the relief as sought had been granted to Bupa below, absent group members would have remained free to pursue their individual claims as a matter of law (although for reasons explained by senior counsel for Bupa, there is good reason to doubt that in those circumstances that would have been likely to happen).

24    It is worth remarking that although s 33J prohibits the hearing of a representative proceeding commencing earlier than the opt-out date (unless the court otherwise orders), the practical operation of Pt IVA is that an interlocutory order designed to determine group members’ substantive claims cannot operate inconsistently with the statutory protection afforded by the opt-out mechanism.

25    This is the reason why, if there is to be a separate determination affecting group members’ claims (in whole or part), it must be preceded by opt-out (or, unusually, prior leave), and generally is best done by early and separate final determination of the relevant issue or issues rather than summary disposal. As it happened, in this case, the primary judge did raise, on more than one occasion, whether the complaints of Bupa ought to be best resolved by way of early, separate and final determination. It seems the position of the respondents that it was not clear how this would result in any saving of time, given the relationship between the contractual claims and the ACL claims, although Bupa’s position was left less definite, and the matter was unresolved at the conclusion of oral argument before her Honour.

26    Accordingly, it seems to me that the possibility of an early and separate determination is not a significant factor.

27    In the end, the only real prejudice relied upon is that articulated in the submissions and that is: Bupa will suffer the burden of defending serious litigation. In circumstances where there is no substantive affectation of Bupa’s rights, and all the arguments as to construction deployed before the primary judge and today before me can be advanced at trial, this does not seem to me to reach the level of substantial injustice.

28    Accordingly, the second limb of the test is not satisfied.

E    SUFFICIENT DOUBT

29    Although it is unnecessary considering the conclusion on substantial injustice, I will also briefly address whether the judgment is attended with sufficient doubt. In any event, a pithy analysis is consistent with such evaluative assessments being undertaken impressionistically.

30    Bupa submits that the primary judge applied the wrong standard by focussing on whether the pleading was “intelligible” rather than whether it disclosed no reasonable prospect of success.

31    I am not satisfied that this submission of arguable House v The King error is made out. The primary judge set out the correct statutory test and referred to the applicable High Court authority concerning the caution required in summary dismissal applications. The use of language concerning “incoherence” or “fundamental and irredeemable incoherence” reflected the way in which Bupa used pejorative epithets to describe the case advanced against it. This is not meant to convey any criticism of Bupa, but it is entirely understandable why her Honour expressed herself in the judgment in the terms adopted by Bupa to deal with the submissions of Bupa.

32    I would be very slow to conclude, even on an arguable basis, that her Honour, after carefully setting out the proper test, could have so misdirected herself to fail to have regard to the fact that she was dealing with whether there was no reasonable prospect of success, rather than some higher standard, particularly given that she returned, when disposing of the application, to the words used in the statutory test (at [75]).

33    Bupa further submits that the primary judge failed to grapple with the asserted legal incoherence in the respondents’ theory of breach and loss, including the “binary” facility-wide breach allegation and the “pro rata” damages model.

34    I am not satisfied that an arguable error in understanding the pleaded case is disclosed at [76]–[81]. The primary judge considered whether the obligation to provide for a stipulated minimum average direct-care minutes per resident on average across each Bupa care home (in order to provide safe and high-quality health care for an individual resident), was one which offended commonsense or was “incoherent”, given the nature of the bargain for services struck. Her Honour’s discussion of this aspect of the case was connected to her observation that there was no insuperable problem with the notion of a person entering into a bilateral contact with a provider, which included an obligation for a provider to make available services to a group of persons, which included the contracting party.

35    None of this is to say that there are not some curiosities about the way in which the contractual case is pleaded. Without the benefit of full argument, it does strike one as intuitively surprising that an individual could receive a standard of health care that most right-thinking persons would consider to be not only adequate, but entirely safe and reasonable, and yet have an individual claim for breach of contract by reason of a failure of Bupa to provide for stipulated minimum average direct-care minutes per resident on average across each Bupa care home. But as senior counsel for the respondents correctly notes, this is an unusual case in some respects.

36    Leaving aside the ACL case, which I will come to presently, the submissions of Bupa, properly analysed, go to what her Honour regarded as contestable questions of contractual construction, the interaction between contractual terms and the legislative regime, and the characterisation of loss. The primary judge concluded, after lengthy and close consideration, that these matters were at least arguable and not suitable for summary determination.

37    Further, although it does not matter, it is trite that if a pleaded compensatory damages loss claim is misconceived and rejected at trial, this does not prevent relief being awarded in the form of nominal damages in the event breach of contract was established (see prayer 1 of the amended originating application). Unlike in tort, the cause of action in contract would still be complete.

38    The ACL case is somewhat different, as it is common ground between the parties that the necessity for an applicant or a group member to prove compensable loss is necessary for there to be contravening conduct. But even if the compensatory damages case was incoherent (and I am not satisfied it is) and the contract case only was one which was suitable to go to trial, it would still be inappropriate to grant summary dismissal.

39    The proper approach to s 31A applications has been a subject of much judicial discourse. It is inappropriate for me even to superficially wade into that area, given the nature of this application.

40    Summary dismissal is a serious step. It requires the Court to be satisfied that a claim has no reasonable prospect of success. It is not the function of the Court at that stage to resolve complex and contested issues of construction unless the difficulty with the case is so deficient as to reach the applicable standard for dismissal reflected in the statutory test as explained in the case law. Many of Bupa’s submissions on leave largely amount to a re‑argument of the merits of its summary dismissal application. I do not consider they identify any arguable error of principle, misapplication of the statutory test, or failure to consider a material argument. The case presently pleaded may have some curiosities, but I am not satisfied it is reasonably arguable that it was not open for her Honour to have reached the conclusion she did.

41    The only additional concern raised in writing and in the draft notice of appeal concerned the suggested failure of the primary judge to deal with the strike-out application. Even leaving aside the usual lack of force in a submission suggesting there is some form of substantial prejudice flowing from a failure to strike out parts of the claim of a moving party the respondent party considers untenable, there is nothing in this point.

42    That is essentially for two reasons: first, the amended originating application did not advance an application to strike out parts of the pleading; and secondly, to the extent that the strike-out application was articulated in argument, it was tied expressly to the broader substantive issues resolved on the summary disposal, and the judge’s findings on those issues rendered any separate strike-out consideration redundant. Only an eye finally attuned to error would contend that some independent reasoning to resolve the strike-out application (as it was finally advanced) was necessary.

F    CONCLUSION

43    Even leaving aside the determinative issue of the lack of substantial prejudice if leave were refused, Bupa has failed to demonstrate the judgment is attended with sufficient doubt.

44    This is precisely the sort of case when one should keep firmly in mind that restraint should be exercised on grants of leave in practice and procedure decisions. Despite the characteristically cogent submissions made by senior counsel for Bupa, it follows that leave to appeal must be refused with costs.

Associate:

Dated: 27 February 2026