FEDERAL COURT OF AUSTRALIA PRACTICE AND PROCEDURE - Representative proceedings - Group members consisting of unidentified members of described categories of people - Liability and some damages claims determined - Power of Court to "close the class" by requiring group members to identify themselves by a particular date - Discretionary considerations - Form and manner of distribution of notice - Time to be allowed. Federal Court of Australia Act 1976, ss 33V, 33Z, 33ZE and 33ZH. BRIAN McMULLIN and LEONE MARGARET McMULLIN v ICI AUSTRALIA OPERATIONS PTY LTD, ICI AUSTRALIA LTD and CROP CARE AUSTRALASIA PTY LTD NG305 of 1995 JUDGE: WILCOX J PLACE: SYDNEY DATE: 12 JUNE 1998 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG305 of 1995 BETWEEN: BRIAN McMULLIN and LEONE MARGARET McMULLIN Applicant AND: ICI AUSTRALIA OPERATIONS PTY LTD First respondent ICI AUSTRALIA LTD Second Respondent CROP CARE AUSTRALASIA PTY LTD Third respondent JUDGE: WILCOX J DATE OF ORDER: 29 MAY 1998 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Applicants on or before 30 June 1998 at the reasonable cost of the Respondents send by prepaid post to each person listed on a Department of Primary Industry or the Department of Agriculture data base as having had CFZ residues in cattle other than a person: (a) listed only as having residues <0.1 ppm; or (b) who is a person on the identified list of applicants referred to in paragraph 3; or (c) whose claim has been settled or heard, a notice in the form "A" annexed to these Minutes. 2. The Applicants on or before 30 June 1998 at the reasonable cost of the Respondents place on two occasions quarter page advertisements in the form "B" annexed to these Minutes in each of "The Land" and "Queensland Country Life" newspapers. 3. The solicitors for the Applicants file and serve on or before 16 June 1998 a list of the names and addresses of each person who has engaged them to seek compensation in this proceeding who claims to be entitled to compensation under the judgment given on 24 June 1997 whose claim has not been settled or been heard. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG305 of 1995 BETWEEN: BRIAN McMULLIN and LEONE MARGARET McMULLIN Applicant AND: ICI AUSTRALIA OPERATIONS PTY LTD First Respondent ICI AUSTRALIA LTD Second Respondent CROP CARE AUSTRALASIA PTY LTD Third Respondent JUDGE: WILCOX J DATE: 12 june 1998 PLACE: SYDNEY REASONS FOR JUDGMENT (No. 6) WILCOX J: These reasons deal with a procedural aspect of this long-running representative proceeding: whether it is competent and desirable for the Court to make an order that has the effect of "closing the class" of group members. History The history of the proceeding is recorded in my reasons for judgment on liability reported at (1997) 72 FCR 1. For present purposes, it is enough to note the proceeding was instituted on 3 May 1995 by two applicants, Brian McMullin and Leone Margaret McMullin, on behalf of themselves and group members who were identified only by description of the types of loss they claimed to have suffered by reason of the respondents' negligence and contraventions of the Trade Practices Act 1974 and State Fair Trading Acts. As I recorded in my judgment on liability, some people apparently falling within the identified group filed opt-out notices pursuant to s 33J(2) of the Federal Court of Australia Act 1976; even so the solicitors for the applicants knew of some 470 persons who then remained as group members. No doubt some of those people subsequently fell by the wayside, as a result of my decision about the categories of people to whom the ICI respondents owed a duty of care. The judgment on liability was delivered on 24 June 1997. It attracted considerable publicity. Possibly as a result, further persons subsequently identified themselves to the applicants' solicitors as persons claiming to fall within the group description. The solicitors have been collecting information about the claims of which they are aware and providing this to the respondents' solicitors. Some damages claims have been heard and determined; others heard and not yet determined; and many others have been settled. Recently, I made orders under s 33Q(2) of the Act constituting 16 sub-groups consisting of particular persons who each claimed less than $100,000, and delegating to a Judicial Registrar of the Court power to hear and determine those claims. I anticipate further delegations will be made as other small claims become ready for hearing. No doubt it will be necessary for me, or some other Judge, to hear further large claims. At a directions hearing on 12 March 1998, counsel for the respondents applied for an order that would have the effect, after due notice, of "closing the class" of group members; that is, would preclude (or, at least, inhibit) maintenance of a claim for damages by a group member who failed to come forward and identify himself or herself by a particular date. Counsel contended that, without such an order, nobody (not even the respondents or the Court) would ever know when the proceeding was complete; it would be open to a person who fell within one of the described groups to make a claim many years hence, by which time important evidence might have been lost. After 12 March, I received written submissions about this application from the legal representatives of both parties. Mr John Rowe, counsel for the applicants, indicated his clients felt unable to consent to such an order; it would affect the interests of unidentified individuals from whom they obviously could not obtain instructions. Mr Rowe questioned the Court's power to make such an order but indicated his clients did not oppose an order, if the Court was satisfied it would be within power. In their written submissions, the solicitors for the respondents pressed for an order and argued it was within power. I decided to postpone a decision on the application until counsel were next before the Court, for damages hearings in the fortnight commencing 18 May 1998. During that period the matter was discussed in Court. I indicated I was satisfied the Court had power to make an order of the type sought by the respondents and thought it appropriate to do so. On 29 May I made orders in accordance with the attached Minute of Order. I said I would later give reasons referring to the matter of power. The existence of power to "close the class" The Federal Court of Australia Act does not confer on the Court any specific power to make orders that have the effect of "closing the class" of group members. There is a provision, s 33V, dealing with settlement of a representative proceeding. That provision is not limited to a global settlement of all group members' claims but plainly includes such a settlement. Subsection (2) of s 33V provides that, if the Court gives such an approval, "it may make such orders as are just with respect to the distribution of any money paid under a settlement or paid into the Court". The Court might be loathe to approve a settlement involving unquantified claims of unidentified group members, but it is clear that, as a matter of power, the Court could make such an order. Normally, notice would have to be given: see s 33X(4). If the Court was not confident all the group members were known by name, and so could be notified by letter, it would probably direct the publication of one or more media notices. Once notice was given, the Court might make an order that had the effect of precluding any later claim by a group member. Section 33V applies only to cases where a settlement is approved. That is not the present situation. However, the respondents say the present situation is covered by s 33Z(1)(g) of the Act. That paragraph confers on the Court one of a number of powers that are independent of approval of a settlement. The subsection reads: "(1) The Court may, in determining a matter in a representative proceeding, do any one or more of the following: (a) determine an issue of law; (b) determine an issue of fact; (c) make a declaration of liability; (d) grant any equitable relief; (e) make an award of damages for group members, sub-group members or individual group members, being damages consisting of specified amounts or amounts worked out in such manner as the Court specifies; (f) award damages in an aggregate amount without specifying amounts awarded in respect of individual group members; (g) make such other order as the Court thinks just." The respondents argue para (g) is wide enough to cover the case of an order requiring group members to identify themselves by a particular date or lose their right to claim. I do not think such an order is sanctioned by s 33Z(1)(g). Section 33Z is included in Division 4 of Part IVA of the Act, which is headed "Judgement Etc". It is concerned with the Court's powers "in determining a matter"; that is, resolving the controversy between the parties. Paragraphs (a) to (f) each relate to the substance of the Court's decision or the available form of relief. I think para (g) is also concerned with those matters; it is included to empower the Court to make any other order, in relation to relief, that seems just. I do not think s 33Z(1)(g) empowers the Court to make a procedural order limiting future claims. However, this does not mean such an order is beyond power. Section 33ZF confers a wide and general power on the Court. That section provides: "(1) In any proceeding (including an appeal) conducted under this Part, the Court may, of its own motion or on application by a party or a group member, make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding. (2) Subsection (1) does not limit the operation of section 22." Section 22 of the Act is concerned with remedies. But I do not think this reference limits the generality of s 33ZF(1). If the subsection had been intended to be limited to orders by way of remedy, it would have been unnecessary; s 33Z(1)(g) would have already conferred the necessary power. Section 33ZF appears in Division 6 of Part IVA which is headed "Miscellaneous". It bears the marginal note "General power of Court to make orders". These two features support the conclusion, that would in any event arise from its wording, that s 33ZF(1) was intended to confer on the Court the widest possible power to do whatever is appropriate or necessary in the interests of justice being achieved in a representative proceeding. It is understandable Parliament should have thought it appropriate to make such a provision. In enacting Part IVA of the Federal Court of Australia Act,Parliament was introducing into Australian law an entirely novel procedure. It was impossible to foresee all the issues that might arise in the operation of the Part. In order to avoid the necessity for frequent resort to Parliament for amendments to the legislation, it was obviously desirable to empower the Court to make the orders necessary to resolve unforeseen difficulties; the only limitation being that the Court must think the order appropriate or necessary to ensure "that justice is done in the proceeding". I think an order fixing a date by which claimants must identify themselves is capable of falling within s 33ZF(1). The criterion "justice is done", involves consideration of the position of all parties. An order preventing unfairness to a particular party may be necessary to ensure justice is done in the proceeding. Exercise of the power I have already referred to the respondents' reasons for seeking the order. In their written submissions, the respondents' solicitors say that, if no closing date is provided, "the proceeding is without end"; the respondents "can never know whether they have resolved all claims". The solicitors point out this situation is contrary to "the normal situation where the respondent can resolve the claims of the actual applicants and end that litigation and, when the limitation period has expired, be satisfied no more like claims can be pursued by any further litigation". There is force in this argument. The claims would never become statute-barred. Section 33ZE(1) of the Act provides that, upon the commencement of a representative proceeding, "the running of any limitation period that applies to the claim of a group member to which the proceeding relates is suspended". Section 33ZE(2) says the limitation period "does not begin to run again" unless either the member opts out of the proceeding under s 33J or the proceeding, and any appeals arising out of it, "are determined without finally disposing of the group member's claim". At first sight, the second alternative might seem to apply. But it does not. Where damages are being individually assessed, as here, the proceeding would not be "determined" until all individual claims were assessed. I think it would be unfair to the respondents to allow a situation where they could never regard the proceeding as finalised. Although I think it is appropriate to make an order requiring notification of claims, with a view to "closing the class", I have been concerned about the terms and manner of distribution of the notice and the time allowed for claims to be notified. Any notice that is to be issued to members of the public in connection with a representative proceeding must be readily comprehensible by non-lawyers. It should be written in plain English. The notices I approved meet this requirement. As to distribution, although there is no complete list of all persons who suffered losses through Helix contamination, there are lists of graziers whose cattle tested positive to contamination. The persons on these lists will account for the great majority of potential claimants. As their names and addresses are known, it is possible to write to them directly and the order requires this to be done. Even so, some potential claimants might not receive a personal notice - either because the letter goes astray or because they fall into the second, third or fourth category of potential claimant identified in the judgment on liability. No list of such persons is held but they will all be persons closely connected with the cattle industry, at least in recent times. They are likely already to be aware of this proceeding but it is still necessary to give them notice of the cut-off date. This can best be done by advertisements in "The Land" and "Queensland Country Life", two weekly newspapers that the evidence shows to be widely read in rural New South Wales and Queensland. The orders require substantial (quarter page) advertisements to be published on two separate occasions by 30 June. There is a dilemma about the appropriate length of notice. The allowed period needs to be long enough to cover recipients' absences on work or holidays, illnesses and other temporary distractions. On the other hand, if it is very lengthy, recipients may procrastinate and end up missing the deadline. I think two months is long enough to cover temporary absences and distractions but short enough to inculcate a sense of urgency. For that reason I fixed 31 August as the last date for notification of claims. I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox Associate: Dated: Counsel for the Applicant: J E Rowe Solicitor for the Applicant: Peter Long & Co Counsel for the Respondent: D Habersberger QC and G McArthur Solicitor for the Respondent: Phillips Fox Written submissions in March 1998 Date of Hearing: 29 May 1998