Federal Court of Australia

Buttgieg v Macquarie Bank Limited [2026] FCA 1500

ORDERS

THE COURT ORDERS THAT:

Leave to intervene

1.    Rachelle Maree Dessent be granted leave to intervene in relation to the applicant’s interlocutory application filed 11 September 2026 (Discontinuance Application) and to file evidence and written submissions and to appear and make oral submissions at the hearing of or in relation to the Discontinuance Application.

Discontinuance

2.    The applicant have leave to discontinue the proceedings pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth).

3.    There be no order as to the costs of the proceedings.

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

REASONS FOR JUDGMENT

DERRINGTON J:

Introduction

1    This is an application for leave to discontinue a class action brought by the applicant, Ms Julie Buttgieg, against Macquarie Bank Limited (Macquarie Bank) and Macquarie Investment Management Ltd as trustee for the Macquarie Superannuation Plan. The application is somewhat unusual in that the originating application and statement of claim have not yet been served on the respondents. However, owing to the breakdown of a funding arrangement and other matters, the applicant no longer wishes to pursue the proceedings.

2    For the reasons that follow, it is appropriate that the applicant be granted leave to discontinue the proceedings.

Genesis of the application

3    There is no need to recite in detail the history of these proceedings. It suffices to observe that they appear to have arisen from regulatory action commenced by the Australian Securities and Investments Commission against Macquarie Bank: Australian Securities and Investments Commission v Macquarie Bank Limited [2024] FCA 416. Those proceedings were decided on the basis of an agreed statement of facts and admissions, which appears to have influenced the allegations sought to be advanced here. In broad terms, the applicant’s claim is that Macquarie Bank failed to implement adequate controls governing the use of clients’ accounts by financial advisers. As a result of that failure, so it is alleged, a number of people suffered loss and damage.

4    However, the applicant has identified three issues with the proceedings, as they are presently constituted by the originating application and statement of claim, which may inhibit her prospects of success.

5    In the first instance, the precise boundaries of the representative group, and the extent of its membership, are difficult to ascertain. The “Group” is described in the originating application as comprising two parts: the “Whole Group” and the “Sub-group”. To be a group member, a person must satisfy at least the Whole Group criteria and may also satisfy the Sub-group criteria so as to fall within that Sub-group. However, a person who satisfies the Sub-group criteria, but not the Whole Group criteria, cannot be a group member.

6    As it transpired, the applicant does not satisfy the Whole Group criteria and is, therefore, not a group member. This renders the proceedings susceptible to strike out for non-compliance with s 33C of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) or, at the very least, the risk that such an application might be made. Indeed, if the application were served, a strike out on that basis would be inevitable.

7    Moreover, the criteria used to define the group have substantially limited its potential members. The applicant considers it to be objectively likely, if not certain, that there are not more than thirteen people who may satisfy the Whole Group criteria. The identity of those thirteen people is not presently known to the applicant’s solicitors. Given that each potential group member would be entitled to opt out, there is a real possibility that fewer than seven group members would remain, in which case the proceedings could not continue as representative proceedings: see Federal Court Act s 33C.

8    A related issue is that the thirteen possible group members may not satisfy the description in the originating application of persons who have “suffered, or claim to have suffered, loss or damage”. That is because Macquarie Bank has undertaken a remediation process by which customers identified as having suffered loss as a result of an “Unauthorised Transaction” were repaid in full, with interest. That, however, is distinct from those customers whose funds were invested in the “Shield Master Fund”, who, it appears, were not paid interest. The sufficiency of that latter aspect of the remediation process is presently the subject of separate class action proceedings in the Supreme Court of Victoria (S ECI 2026 06235) (the “SMF Proceedings”). The lead plaintiff in those proceedings, Ms Rachelle Dessent, sought and obtained leave to make submissions on this application on the basis that there is some overlap between the claims advanced in the present proceedings, to the extent that some claimants in the SMF Proceedings may fall within the Sub-group criteria. For the avoidance of doubt, nothing in these reasons should be taken as suggesting that Ms Dessent accepts, or has accepted, that the remediation the subject of the SMF Proceedings was sufficient.

9    Nevertheless, for present purposes, those who fall within the Whole Group criteria may have been fully compensated for any loss suffered by reason of Macquarie Bank’s impugned conduct. If so, there is a risk that many prospective group members would be limited to claims for lost investment opportunities. That claim is itself problematic, given that Macquarie Bank appears to have paid interest at above-market rates as part of the remediation process for Unauthorised Transactions. Moreover, and in any event, claims of that nature are often difficult to establish because they necessarily depend upon speculation as to the outcome of alternative investments. Accordingly, there is a serious question as to whether any prospective group member has suffered any recoverable loss.

10    The final difficulty is the issue of funding. The proceedings were initially the subject of a funding arrangement; however, the funder appears to have determined that the litigation bore too much risk to justify continuing that arrangement and has terminated it. It appears that alternative funding options are not presently available.

11    Having been apprised of those difficulties, the applicant is no longer prepared to continue the proceedings, and that is understandable in the circumstances.

The discretion to grant leave to discontinue representative proceedings

12    Section 33V of the Federal Court Act relevantly provides that representative proceedings may not be discontinued without the Court’s approval. That is also reflected in r 26.12(4) of the Federal Court Rules 2011 (Cth).

13    The circumstances in which the Court should exercise its discretion to grant leave to discontinue representative proceedings have been set out in a number of cases. Relevantly, in Francis (Trustee) v Oculus Accounting Pty Ltd (No 2) (2021) 155 ACSR 426 at 432 – 435 [28] – [33], to which the applicant referred, the relevant principles were summarised as follows:

[28]    In Wotton v Queensland (2009) 109 ALD 534, Rares J made the following observations in relation to the approval of a discontinuance under that section (at 544 – 545 [37] – [42]):

What, if any orders, should be made on a discontinuance or dismissal?

…

[37]    Under s 33V(1), a representative proceeding cannot be settled or discontinued without the approval of the court. The decided cases on s 33V(1) all appear to have been concerned with settlements, rather than discontinuances. The considerations affecting a settlement are not always the same as a discontinuance. It is important that any order that is made has regard to the interests not only of the present parties but of group members who may be affected by the terms of any grant of leave to discontinue.

…

[39]    No group member would suffer any prejudice that has been identified if leave to discontinue these proceedings were granted to Mr and Mrs Wotton on the basis that the discontinuance were treated as affecting only those two applicants’ rights and interests.

[40] The court has an important responsibility of safeguarding the interest of group members as a whole under s 33V(1). There is a danger that when a settlement is reached or a discontinuance is agreed, the interests of the actual parties to the proceedings may receive their paramount consideration while the impact on group members may not be fully or properly addressed. That is why in exercising the power under s 33V(1) to approve a settlement or discontinuance the court must scrutinise with great care the way in which any order is formulated. In the decided cases the courts have approached settlements with a keen eye to ensuring that the interests of group members are vouched safe: see for example Australian Competition and Consumer Commission v Chats House Investments Pty Ltd (1996) 71 FCR 250 at 258B–C; 142 ALR 177 at 184–5; 22 ACSR 539 at 546–7 per Branson J; McMullin v ICI Australia Operations Pty Ltd (1998) 84 FCR 1 at 3C–E; 156 ALR 257 at 259 (McMullin) per Wilcox J; Courtney at [45] per Sackville J and Vernon v Village Life Ltd [2009] FCA 516 at [64]–[68] per Jacobson J.

[41] And, the power in s 33ZF(1) enables the court to make any order that it thinks appropriate or necessary to ensure that justice is done in a proceeding under Pt IVA. Wilcox J described the extent of the power in s 33ZF(1) as being “the widest possible” in McMullin at FCR 4C–D; ALR 260. In Courtney at [47]–[54] especially at [52] Sackville J examined the scope of the power, and cautioned that s 33ZF(1) should not become a vehicle for rewriting the rest of Pt IVA. This provision, like all provisions conferring jurisdiction or granting powers to a court, should not be construed narrowly by making implications or imposing limitations which are not found in its express words: Owners of the Ship “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 at 421; 125 ALR 1 at 10; [1994] HCA 54 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ.

[42] The parties agreed that any order permitting discontinuance or dismissing the proceedings should be framed so as not to affect the rights of other group members than Mr and Mrs Wotton. I am satisfied that this is a correct approach. In my opinion I should make a declaration reflecting my findings on the nature of these proceedings and the fact that their outcome affects only Mr and Mrs Wotton’s rights under s 46PO(2).

[29]    In Mercedes Holdings Pty Limited v Waters (No 1) (2010) 77 ACSR 265, Perram J described the test to be applied as follows (at 268 [10]):

[10]    The course of authority confirms that the task of the approving court is to assess whether the compromise or discontinuance “is a fair and reasonable” one (Lopez v Star World Enterprises Pty Ltd (1999) ATPR 41-678 at 42,670; [1999] FCA 104 per Finkelstein J) which requires one to be satisfied that the settlement or discontinuance “has been undertaken in the interests of the group members as a whole, and not just in the interests of the applicant and the respondent”: Australian Competition and Consumer Commission v Chats House Investments Pty Ltd (1996) 71 FCR 250 at 258; 142 ALR 177 at 184–5; 22 ACSR 539 at 546–7 per Branson J. Consequently, common sense suggests, and authority confirms, that the applicant for leave bears the onus of showing that the settlement or discontinuance is in the interests of all class members.

[30]    Although that tends to be the preferred approach: see e.g. AUB19 [17]; Tate [34] – [35]; a divergent approach has emerged which involves the application of a slightly less strict test. This emphasises a consideration of whether group members would be disadvantaged by the giving of approval to applicants to discontinue the proceedings, as opposed to whether the discontinuance would be positively in their interests. Yates J articulated the competing views in Simonetta v Spotless Group Holdings Limited [2017] FCA 1071 as follows (at [12]):

12    In Mercedes Holdings Pty Limited v Waters (No 1) [2010] FCA 124 (Mercedes Holdings) at [10] and [24], Perram J said that the question arising on an application for discontinuance is whether the proposed discontinuance would be fair and reasonable not only in the interests of the immediate parties but of the group members as a whole. In Laine v Thiess Pty Ltd; Beetson v SunWater Limited (Laine), Dixon J analysed the matter somewhat differently by considering whether the discontinuance would be unfair or unreasonable or adverse to the interests of group members: see at [34]. The applicants suggested that the approach in Laine might be more apt where, as here, the practical effect of the discontinuance, if approved, will be to do no more than return group members to the position they were in before the commencement of the proceeding. I think there is some merit in that submission but, as the question was not addressed in any detail, and as my consideration of the present application does not turn on any difference between the approach in Mercedes Holdings and the approach in Laine, I will refrain from expressing any concluded view on it.

[31]    In Babscay Pty Ltd v Pitcher Partners (2020) 148 ACSR 551 (Babscay) at 555 – 557 [20] – [28], Anastassiou J considered the competing views and expressed a preference for considering whether a proposed discontinuance would be unfair, unreasonable, or adverse to the interests of other group members. He observed that the effect on the claims of other group members of discontinuing a representative proceeding is plainly different to the effect of a court approved settlement. It followed that the Court’s task in considering whether to approve a discontinuance has a different emphasis compared with the approval of a settlement: at 555 [19].

[32] This divergent line of authorities appears to have its origin in the decision of John Dixon J in Laine v Thiess Pty Ltd [2016] VSC 689 [34]. In the more recent decision in Turner v Bayer Australia Ltd [2021] VSC 241, his Honour referred to the differing approaches and adopted his reasoning from the earlier case. However, as he acknowledged, any difference between the tests will be illusory in most circumstances: at [47].

[33]    In this case, where there have been no useful submissions in relation to the issue and it is inappropriate to approve the discontinuance no matter which test is applied, there is no need to reach a conclusion as to which of the diverging tests is more appropriate. That said, there is much force in the view which prefers the less stringent test. The benign effect of discontinuing a representative proceeding on group members’ rights may make it difficult to conclude that a proposed discontinuance is “in the interests of all class members” even where it is plainly appropriate. By contrast, if there is sufficient evidence of the circumstances, it will normally be possible to reach a conclusion as to whether the discontinuance would be unfair, unreasonable, or adverse to the interests of group members.

14    The apparent divergence in the applicable test for discontinuances was also recently summarised by Hespe J in Inger v Queensland [2026] FCA 792 at [11] (Inger) and O’Bryan J in Fisher v BT Funds Management (No 2) [2024] FCA 1340 at [23] – [24] (Fisher).

It is appropriate to grant leave

15    Whatever formulation is adopted, in the circumstances described at supra [4] – [10], it is fair and reasonable and in the interests of the group members as a whole to permit the proposed discontinuance. In particular, the absence of funding is significant because, as a practical matter, it materially impedes the continuation of the proceedings in their present form. It also reflects the difficulties identified above, and perhaps the attitudes of the erstwhile funder and other potential funders towards the prospects of success.

16    This conclusion is also supported by several additional factors:

(1)    The discontinuance will not finally determine or extinguish the claims of group members.

(2)    The group members will not be liable for any costs of the proceedings.

(3)    The discontinuance does not create any limitation issue, by reason of the operation of s 33ZE(1) of the Federal Court Act. That provision gives group members the benefit of a suspension of any relevant limitation period from the commencement of the proceedings. Though there is some conjecture in the authorities as to the point at which time may begin to run again after a discontinuance: Inger [16]; Fisher [33] – [35]: that has no bearing on the effect of s 33ZE(1).

Notice to potential group members

17    One additional matter for consideration is the nature of any notice which should be given to potential group members. It appears that some notice of the proceedings has been given, but a question has arisen as to whether any further notice is required.

18    It was submitted by Mr Edwards, on behalf of the intervener, Ms Dessent, that further notice might generate confusion among group members in the SMF Proceedings. Whilst that may be so, it is relevant only to the extent that there is some overlap between the group members in the SMF Proceedings and those who could fall within the Sub-group criteria here. That is because the Court’s concern is with the interests of potential group members in these proceedings. Therefore, this issue should be given limited weight.

19    Nevertheless, in the unusual circumstances of this case, it is not necessary to order that any further notice be given. That is because requiring further notice would put the applicant to unnecessary expense, the number of potential group members appears to be very small, and their identities are not presently known. Moreover, the proceedings have terminated at a very early stage, and there has been limited publicity or notification of them. Indeed, Macquarie Bank has not even been served. No order requiring further notice should therefore be made.

No declaration of group members’ rights

20    Finally, it is appropriate to briefly mention that the applicant initially sought a declaration that the discontinuance would not affect the rights of the applicant or any group member in these proceedings to pursue their claims in other proceedings.

21    There can be no doubt that, in come cases, there may be good reasons for making such a declaration: see, for example, Simonetta v Spotless Group Holdings Limited [2017] FCA 1071 [29]; Wotton v Queensland (2009) 109 ALD 534, 544 – 545 [38] – [42]. However, such reasons do not arise in this case, as Macquarie Bank has not been served. Consequently, it has not been afforded the opportunity to make submissions in respect of a declaration which may affect its interests.

22    In that regard, it is also appropriate to observe that, since Macquarie Bank has not been served, nothing in these reasons should be understood as expressing any view concerning its substantive rights or liabilities, or the merits of any claim that may subsequently be advanced against it.

Disposition

23    For the foregoing reasons, the circumstances of this case justify an order that the applicant have leave to discontinue the proceeding pursuant to s 33V of the Federal Court Act. There should be no order as to the costs of the proceedings.

Note

24    These are the amended and revised reasons for judgment given on 1 October 2026. Whilst the reasons given above refine and develop those that were delivered ex tempore, the substance of what was said that day has not been changed nor has any other material change been made.

Associate:    

Dated:    9 October 2026