FEDERAL COURT OF AUSTRALIA Farey v National Australia Bank Ltd [2014] FCA 1242 Citation: Farey v National Australia Bank Ltd [2014] FCA 1242 Parties: STEVEN HAROLD FRANCIS FAREY, SUSAN ANN FAREY and FAREY ENTERPRISES PTY LTD ACN 088 629 627 v NATIONAL AUSTRALIA BANK LTD ACN 004 044 937 File number: VID 1459 of 2011 Judge: JACOBSON J Date of judgment: 18 November 2014 Catchwords: REPRESENTATIVE PROCEEDING – Application for orders pursuant to s 33ZF of the Federal Court of Australia Act 1976 (Cth) to "open", and then after a notification period "close" the class eligible to participate in any settlement sum – Adequacy of the notices proposed to be published Legislation: Federal Court of Australia Act 1976 (Cth) Cases cited: Courtney v Medtel Pty Limited (2002) 122 FCR 168 Harrison v Sandhurst Trustees Limited [2011] FCA 541 Inabu Pty Limited v Leighton Holdings Pty Limited [2014] FCA 622 McMullin v ICI Australia Operations Pty Limited (1998) 84 FCR 1 Winterford v Pfizer Australia Pty Limited [2012] FCA 1199 Date of hearing: 18 November 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 22 Counsel for the Applicants: Mr M B J Lee SC, Mr W A D Edwards Solicitor for the Applicants: Maurice Blackburn Counsel for the Respondent: Mr J Karkar QC, Mr R Pintos-Lopez Solicitor for the Respondent: National Australia Bank IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1159 of 2011 BETWEEN: STEVEN HAROLD FRANCIS FAREY First Applicant SUSAN ANN FAREY Second Applicant FAREY ENTERPRISES PTY LTD ACN 088 629 627 Third Applicant AND: NATIONAL AUSTRALIA BANK LTD ACN 004 044 937 Respondent JUDGE: JACOBSON J DATE OF ORDER: 18 NOVEMBER 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: Class Closure and Opt Out 1. To the extent necessary, the stay of this proceeding which was ordered on 6 March 2014 be lifted for the purpose of making the Orders set out below. 2. Pursuant to ss 33K and/or 33ZF of the Federal Court of Australia Act 1976 (Cth) (FCAA), the applicants have leave to file a Further Amended Originating Application and a Further Amended Statement of Claim in the form of Annexures 'AJW-3' and 'AJW-4' to the Affidavit of Andrew John Watson sworn 6 November 2014. 3. Pursuant to s 33J of the FCAA, 4.00 pm on 27 January 2015 be fixed as the time and date before which a Group Member may opt out of this proceeding. 4. Pursuant to s 33ZF of the FCAA, with the exception of those persons who were Group Members in this proceeding before the amendments referred to in Order 2 above (Previous Group Members), any Group Member who wishes to participate in the distribution of any amount agreed in settlement of this proceeding shall, by no later than 4.00 pm on 27 January 2015, register as a participating Group Member either by: a. registering on the website of Financial Redress Pty Ltd (FRPL) (www.financialredress.com.au); or b. mailing a completed registration form, in the form set out in Annexure A to these Orders, to FRPL at the address shown on the form. 5. Pursuant to s 33X of the FCAA, notice of the commencement of this proceeding, of the right of Group Members to opt out of this proceeding, and of the substance and effect of these Orders, is to be given to Group Members in accordance with Orders 6 to 9 below. 6. The form and content of the notices set out in Annexure B (Annexure B Notice) and Annexure C (Annexure C Notice) to these Orders (together, Notices) is approved for the purposes of s 33Y(2) of the FCAA. 7. The Notices are to be given by the Applicants to Group Members by 4.00 pm on 25 November 2014 by causing, at the expense of the Applicants: a. a copy of the Annexure B Notice to be sent by email to each Previous Group Member for whom the solicitors for the Applicants and/or FRPL hold a current email address; and b. a copy of the Annexure B Notice to be sent by mail to the last known address of each Previous Group Member for whom the solicitors for the Applicants and/or FRPL do not hold a current email address; and c. a copy of the Annexure C Notice, together with a copy of the Further Amended Originating Application, Further Amended Statement of Claim and these Orders, to be displayed on, or otherwise made available for download from, the website of: i the Applicants' solicitors (www.mauriceblackburn.com.au); and ii FRPL (www.financialredress.com.au), and to remain continuously so displayed or available up to and including 4.00 pm on 27 January 2015. 8. The form and content of the notice set out in Annexure D to these Orders (Advertisement) is approved for the purposes of s 33Y(2) of the FCAA. 9. The Advertisement is to be given by the Applicants to Group Members by 4.00 pm on 25 November 2014 by causing, at the expense of the Applicants, a copy of the Advertisement to be published once in the following newspapers: (a) The Australian; (b) The Australian Financial Review; (c) The West Australian; (d) The Advertiser; (e) The Age; (f) The Mercury; (g) The Sydney Morning Herald; (h) The Canberra Times; (i) Courier Mail; (j) Northern Territory News. 10. The notices in Annexures B, C and D to these Orders may be amended by the solicitors for the Applicants before they are emailed, displayed or published in order to correct any website or email address or telephone number or other non-substantive error. 11. Any person who is a Group Member and who neither opts out nor (except for Previous Group Members) registers as a participating Group Member in accordance with Order 4 above by 4.00 pm on 27 January 2015 will remain a Group Member for all purposes, and will be bound by any resolution of this proceeding, but, subject to further order, shall not be entitled to receive a distribution from any amount agreed in settlement of this proceeding. 12. If the solicitors for any party receive, on or before 4.00 pm on 27 January 2015, a notice purporting to be an opt out notice referable to this proceeding, the solicitors shall file the notice in the Victoria District Registry of the Federal Court of Australia within three (3) days, and the notice shall be treated as an opt out notice received by the Court at the time it was received by the solicitors. 13. The solicitors for the Applicants and the solicitors for the Respondent have leave to inspect the Court file and copy any opt out notices filed. 14. By 4.00 pm on 3 February 2015 the Applicants will: a. deliver to the Respondent a list (in electronic form) of all persons who, on or before 4.00 pm on 27 January 2015, registered as a participating Group Member in accordance with Order 4 above (Registered Group Members), which list shall contain: i all of the information provided by each Registered Group Member at the time of registration; and ii any amendments to that information as notified to the solicitors for the Applicants and/or FRPL by 4.00 pm on 27 January 2015, with such information to be kept confidential by the Respondent; and b. file with the Court, in a sealed envelope marked "Confidential List of Registered Group Members – Not to be opened without leave of the Court or a Judge", a consolidated list of the Registered Group Members and Previous Group Members. 15. Liberty is reserved to the solicitors for the Applicants to apply for the addition, deletion or amendment of persons or details to or from the list of Registered Group Members and Previous Group Members referred to in Order 14 above if it appears that the omission or inclusion of a person or details was the result of an error by the solicitors or otherwise. 16. The costs of and incidental to the procedure set out in Orders 2 to 15 above shall be costs in the proceeding. For the avoidance of doubt, answering enquiries by Group Members and members of the public in relation to the Notices or the Advertisement is work incidental to Orders 2 to 15 above. 17. Until further order, and on the ground that it is necessary to prevent prejudice to the proper administration of justice, the following parts of the Affidavit of Andrew John Watson sworn 6 November 2014 be the subject of a suppression order under s 37AF of the FCAA and be ordered confidential within the meaning of rr 2.32(1)(b) and (3)(a) of the Federal Court Rules 2011 (Cth): a. Para [14], all of the words from "which have included …" until the end of the paragraph; and b. Para [15], the whole of the paragraph. Funded Class 18. Subject to further order, each Registered Group Member will be bound by the requirements in Orders 19 to 24 below. 19. The following definitions apply in Orders 19 to 24 below: a. Adverse Costs Order means any Costs Order made in favour of the Respondent against the Applicants in this proceeding in respect of costs incurred during the conduct of the proceeding; b. Costs Order means an order made by the Court requiring one or more parties to this proceeding to pay the costs incurred by another party or parties to the proceeding; c. Funder means Bentham IMF Ltd; d. Funding Agreements means the respective Funding Agreements between the Applicants, the Previous Group Members and the Funder relating to the funding of this proceeding, in the form of Annexure E to these Orders; e. Resolution means when all or part of the Resolution Sum is received, and where the Resolution Sum is received in parts, a 'Resolution' occurs each time a part is received; f. Resolution Sum means the amount or amounts, or the value of benefits, for which the proceeding is settled, or for which judgment is given, in favour of the Applicants and Group Members (as that definition has been amended by these Orders), including any interest and including costs recovered pursuant to a Costs Order or by agreement; g. Settlement means any settlement, compromise, discontinuance or waiver of the proceeding or part of the proceeding with the approval of the Court, and 'settles' shall be construed accordingly. Application of Resolution Sum 20. Any Resolution Sum will be received by the solicitors for the Applicants to be paid immediately into an account kept for that purpose. 21. The solicitors for the Applicants will forthwith pay out of the account referred to in Order 20 above all payments referred to in Order 22 below with the balance to be distributed in accordance with any distribution scheme approved by the Court. Costs and Commission 22. Upon Resolution, each Registered Group Member will pay to the Funder or its nominee, from the Resolution Sum: a. an amount equal to each Registered Group Member's share of the costs and expenses paid by the Funder in connection with this proceeding, determined in accordance with clauses 5.1(c) and 12.1(a) of the Funding Agreements (and the related definitions of 'Applicant's Individual Costs', 'Applicant's Share', 'Claims' and 'Project Costs' contained therein), as if each Registered Group Member had entered into a funding agreement with the Funder containing those terms; b. an additional amount, on account of GST, being the amount obtained by multiplying the prevailing rate of GST by an amount equal to the consideration to be received by the Funder for any taxable supply made to the Registered Group Member by the Funder; and c. an amount equal to 25% of the Resolution Sum. Termination by the Funder 23. If the Funder terminates its obligations under, and pursuant to the terms of, the Funding Agreements, then it will not be entitled to any payment from Registered Group Members pursuant to Order 22.c above, but will continue to be entitled to receive payment from Registered Group Members pursuant to Orders 22.a and 22.b above although only from the Resolution Sum. 24. Termination by the Funder of the Funding Agreements does not affect the following accrued obligations of the Funder to the Applicants or Registered Group Members: a. payment of any outstanding costs and expenses in connection with this proceeding incurred up to the date the termination takes effect; and b. payment of any Adverse Costs Order in respect of costs which arise in, or are attributed to, the period ending on the date the Funder's termination becomes effective. Date that entry is stamped: 19 November 2014 Deputy District Registrar Schedule No: (P)VID1459/2011 Federal Court of Australia District Registry: Victoria Division: General Second Applicant: SUSAN ANN FAREY Third Applicant: FAREY ENTERPRISES PTY LTD (ACN 088 629 627) Annexure A Registration Form – NAB Bank Fees Class Action IMPORTANT NOTICE: If you wish to If you wish to register to participate in the NAB Bank Fees Class Action, and have not previously registered to participate, you can register electronically on the website of Financial Redress Pty Ltd (www.financialredress.com.au) or by completing and mailing this form. register by completing and mailing this form, please ensure that the details referred to below are completed, and that the completed form is mailed to Financial Redress Pty Ltd, PO Box Z5106, Perth WA 6001 in sufficient time for it to be delivered to that address by 4.00 pm on 27 January 2015. If your completed form is not received by that time, you may not be eligible to participate in any future settlement of the NAB Bank Fees Class Action. If you have more than one 'NAB ID' number, you will need to lodge a separate form for each 'NAB ID' number. For example, if you have a personal transaction account and a personal credit card account under the same 'NAB ID' number, you need only lodge one form. If, however, you have those accounts plus a business transaction account under a separate 'NAB ID' number, you will need to lodge separate forms for each separate 'NAB ID' number. 1. Name of Person Lodging Form ………………….. (Mr / Mrs / Ms, etc) ………………………………………………………………………….. Full Name 2. Contact Information Mailing Address (include state and postcode): …………………………………………………………............ ……………………………………………………………………………………………………………….. Telephone No: …………………………………………………………………………………………….... Email Address: ……………………………………………………………………………………………... YOU MUST PROVIDE YOUR NAB ID OR ACCOUNT NUMBERS TO REGISTER 3. NAB Identification Number (This is known as your "NAB ID" and is the account-holder's 8 to 10-digit identification no. assigned by NAB. The number is recorded on the back of your NAB transaction account card or credit card in the top left hand corner. If you are unable to provide your "NAB ID", please provide your account number(s) on the reverse of this form.) …………………………………………….. 4. Name of Account-Holder(s) (This is the name of the person(s) or entity(ies) in which the account was held, and whose name(s) appeared on the account statements. If it is the same as the 'Name of Person Lodging Form' specified above, write 'As Above'.) ……………………………………………………………………………………………………………………………. 5. Type(s) of Account Held With NAB (please tick) [ ] Personal Transaction Account(s) [ ] Personal Credit Card Account(s) [ ] Business Transaction Account(s) 6. Account Numbers (Complete this section only if you have not provided your NAB Identification Number at Item 3 on the reverse side of this page.) Account Number Account Type (please include BSB number) (Personal Transaction Account / Personal Credit Card Account / Business Transaction Account) Annexure B Opt Out Notice FEDERAL COURT OF AUSTRALIA NAB BANK FEES CLASS ACTION Farey & Ors v National Australia Bank Ltd (VID 1459 of 2011) THIS NOTICE IS INTENDED FOR ALL PERSONS WHO HAVE PREVIOUSLY REGISTERED WITH FINANCIAL REDRESS PTY LTD TO PARTICIPATE IN THE NAB BANK FEES CLASS ACTION (BEING THOSE PERSONS WHO HAVE RECEIVED THIS NOTICE VIA EMAIL OR MAIL) PLEASE READ THIS NOTICE CAREFULLY YOU HAVE 2 OPTIONS: 1. DO NOTHING, IN WHICH CASE YOU WILL REMAIN AS A GROUP MEMBER AND CONTINUE TO BE ENTITLED TO RECEIVE ANY REFUND OF FEES THAT MAY BECOME AVAILABLE IN THIS CLASS ACTION 2. COMPLETE AN 'OPT OUT' FORM AND LOSE A RIGHT TO ANY REFUND AVAILABLE IN THIS ACTION BUT KEEP YOUR RIGHT TO TRY AND GET A REFUND YOURSELF 1. Why is this notice important? A class action has been commenced in the Federal Court of Australia by Steven Harold Francis Farey, Susan Ann Farey and Farey Enterprises Pty Ltd (Applicants) against National Australia Bank Ltd (ACN 004 044 937) (NAB). The action arises out of a claim that NAB has unlawfully charged to its customers certain fees on personal and business transaction accounts and personal credit card accounts. The Applicants are represented by solicitors Maurice Blackburn Lawyers, and the action is being funded by Bentham IMF Ltd (IMF). Class registrations and member services are conducted by Financial Redress Pty Ltd, a subsidiary of IMF. The Federal Court has ordered that this notice be published for the information of persons who might be members of the class on whose behalf the action is brought and may be affected by the action. You are a class member if at any time prior to 16 December 2011 you were a customer of NAB, held and operated banking facilities with NAB, and were charged by NAB one or more of the following fees: Personal Transaction Accounts (a) Reference Fee (b) Dishonour Fee - Outward (c) Periodical Payment Dishonour Fee Business Transaction Accounts (d) Reference Fee (e) Dishonour Fee - Outward (f) Irregular Account Fee (g) Periodical Payment Dishonour Fee Personal Credit Card Accounts (h) Late Payment Fee (i) Overlimit Fee You have been identified as a potential class member as a result of you having registered to participate in this class action with Financial Redress Pty Ltd. If you are a class member, you should read this notice very carefully. Any questions you have concerning the matters contained in this notice should not be directed to the Court. If there is anything in it that you do not understand, you should seek legal advice. This notice is part of a court-ordered process to assist the parties to attempt to resolve this proceeding by settlement. In order to do that, the parties need to know how many class members would participate in any settlement of the proceeding, and the potential value of their claims. 2. What is a class action? A class action is an action that is brought by one or more persons (the Applicants) on their own behalf and on behalf of a group of people (class members) against another person (the respondent, in this case NAB) where the Applicants and the class members have similar claims against the respondent. Class members in a class action are not individually responsible for the legal costs associated with bringing the class action. In a class action, only the Applicants or their litigation funder are responsible for the costs. Class members are bound by any judgment or settlement entered into in the class action unless they have opted out of the proceeding. This means that: (a) if the class action is successful, class members may be eligible for a share of any settlement monies or Court-awarded damages; (b) if the class action is unsuccessful, class members are bound by that result; and (c) regardless of the outcome of the class action, class members will not be able to pursue their claims against NAB in a separate legal action unless they have opted out. 3. What is Opt Out? The Applicants in a class action do not need to seek the consent of class members to commence a class action on their behalf or to identify a specific class member. However, class members can cease to be class members by opting out of the class action. An explanation of how class members are able to opt out is found below in the section headed "How can you opt out of the action". 4. What is this class action? This class action, the NAB Bank Fees Class Action, is brought by the Applicants on their own behalf and on behalf of all persons who are "class members" as defined in the action. The Applicants allege in the Further Amended Statement of Claim in Federal Court action VID 1459 of 2011 that NAB charged its customers certain fees (as listed above in Section 1 of this Notice) on personal and business transaction accounts and personal credit card accounts, which were unlawful because, amongst other reasons, they were not a genuine agreed pre-estimate of the loss suffered by NAB as a result of the events giving rise to the charging of the fees, and because they were unconscionable, unfair or unjust. The respondent to the class action is NAB. NAB denies the allegations and is defending the class action. A similar class action has been commenced by other persons against Australia and New Zealand Banking Group Ltd (ANZ), in relation to similar fees charged by ANZ. In that class action, the judge found that late payment fees charged by ANZ on personal credit card accounts were unlawful, but that other fees charged by ANZ on personal and business transaction accounts and personal credit card accounts were not unlawful. Both the applicants in that case and ANZ have appealed the judge's decision, and are awaiting judgment on the appeal. 5. Are you a class member? You are a class member if at any time prior to 16 December 2011 you were a customer of NAB, held and operated banking facilities with NAB, and were charged by NAB one or more of the fees listed above in Section 1 of this Notice. If you are unsure whether or not you are a class member, you should contact Financial Redress Pty Ltd on 1300 473 373 or seek your own legal advice without delay. 6. Will you be liable for legal costs? You will incur no liability for legal costs simply by remaining as a class member. The NAB Bank Fees Class Action is funded by IMF. This means that IMF has agreed to pay all the legal and other costs associated with the action, including any adverse costs orders. Accordingly, if the class action is unsuccessful, class members will have no liability for legal costs. If, however, the class action is successful and you ultimately receive compensation, then you will, in accordance with the Funding Agreement which you entered into with IMF at the time that you registered to participate in this action, be liable for the following costs, which will only be payable by way of a deduction from your compensation amount, and not otherwise: (a) a commission to IMF equal to 25% of your settlement or award (resolution sum); (b) a share of the Applicants' costs in conducting the proceeding, which will be apportioned between class members in proportion to the amount each class member receives in compensation. Under no circumstances will class members be required to pay more in legal costs and commissions than they receive in compensation. Please note, you will be required to pay any costs you incur on your own behalf, including legal advice you choose to obtain from lawyers other than Maurice Blackburn Lawyers. 7. What will happen if you choose to remain a class member? Unless you opt out, you will be bound by the outcome of the class action. If the class action is successful, you may be entitled to share in the benefit of any order, judgment or settlement in favour of the Applicants and class members. (In some cases you may have to satisfy certain conditions before your entitlement arises, such as providing sufficient information to enable the accounts on which you were charged relevant fees to be identified, and therefore the amount (if any) of your compensation entitlement to be determined.) If the action is unsuccessful or is not as successful as you might have wished, you will not be able to sue on the same claim in any other action. 8. How can you remain a class member? If you wish to remain a class member there is nothing you need to do at the present time. The Applicants will continue to bring the action on your behalf up to the point where the Court determines those questions that are common to the claims of the Applicants and the class members. 9. How can you opt out of the class action? If you do not wish to remain a class member you must opt out of the class action. If you opt out you will not be bound by or entitled to share in the benefit of any order, judgment or settlement in the class action, but you will be at liberty to bring your own claim against NAB, provided that you issue Court action within the time limit applicable to your claim. If you wish to bring your own claim against NAB, you should seek your own legal advice about your claim and the applicable time limit prior to opting out. If you wish to opt out of the class action you must do so by completing an "Opt Out Notice" in the form attached, then returning it to the Registrar of the Federal Court of Australia at the address on the form. IMPORTANT: the Notice must reach the Registrar by no later than 4.00 pm on 27 January 2015, otherwise it will not be effective. You should submit the Opt Out Notice if: (a) you qualify as a class member and you wish to opt out of the class action; or (b) you believe that you have been incorrectly identified as a class member, because you do not meet the criteria set out in the section headed "Are you a class member" above. Each class member should fill out a separate form. If you are opting out on behalf of a company or business please provide your name, the name of the company or business and your position within the company or business (e.g. director or partner). 10. Where can you obtain copies of relevant documents? Copies of relevant documents, including the Further Amended Originating Application, the Further Amended Statement of Claim and the orders of the Court regarding this Notice may be obtained by downloading them from www.mauriceblackburn.com.au or www.financialredress.com.au. Please consider the above matters carefully. If there is anything of which you are unsure, you should contact Financial Redress Pty Ltd on 1300 473 373 or email info@financialredress.com.au or seek your own legal advice. You should not delay in making your decision. Form 21 Rule 9.34 Opt out notice VID 1459 of 2011 Federal Court of Australia District Registry: Victoria Division: General STEVEN HAROLD FRANCIS FAREY and others Applicants NATIONAL AUSTRALIA BANK LTD (ACN 004 044 937) Respondent To: The Registrar Federal Court of Australia Victoria District Registry Owen Dixon Commonwealth Law Courts Building 305 William Street, Melbourne Vic 3000 ……………………………….. (insert name), a group member in this representative proceeding, gives notice under section 33J of the Federal Court of Australia Act 1976, that I am opting out of the representative proceeding. Date: Signed by (insert name) Group Member / Lawyer for the Group Member Filed on behalf of (name & role of party) Prepared by (name of person/lawyer) Law firm (if applicable) Tel Fax Email Address for service (include state and postcode) . [Version 2 form approved 9/10/13] Annexure C Registration and Opt Out Notice FEDERAL COURT OF AUSTRALIA NAB BANK FEES CLASS ACTION Farey & Ors v National Australia Bank Ltd (VID 1459 of 2011) THIS NOTICE IS INTENDED FOR ALL PERSONS WHO HAVE NOT PREVIOUSLY REGISTERED WITH FINANCIAL REDRESS PTY LTD TO PARTICIPATE IN THE NAB BANK FEES CLASS ACTION BUT ARE CLASS MEMBERS AS DEFINED BELOW PLEASE READ THIS NOTICE CAREFULLY IF YOU WISH TO PARTICIPATE IN THIS CLASS ACTION YOU MUST COMPLY WITH THIS NOTICE. IF YOU DO NOT DO SO YOUR RIGHTS MAY BE LOST. YOU HAVE 3 OPTIONS: 1. DO NOTHING AND LOSE ANY RIGHTS TO ANY REFUND OF FEES IF THIS ACTION SETTLES 2. REGISTER TO RECEIVE ANY REFUND THAT MAY BECOME AVAILABLE IN THIS CLASS ACTION 3. COMPLETE AN 'OPT OUT' FORM AND LOSE A RIGHT TO ANY REFUND AVAILABLE IN THIS ACTION BUT KEEP YOUR RIGHT TO TRY AND GET A REFUND YOURSELF 1. Why is this notice important? A class action has been commenced in the Federal Court of Australia by Steven Harold Francis Farey, Susan Ann Farey and Farey Enterprises Pty Ltd (Applicants) against National Australia Bank Ltd (ACN 004 044 937) (NAB). The action arises out of a claim that NAB has unlawfully charged to its customers certain fees on personal and business transaction accounts and personal credit card accounts. The Applicants are represented by solicitors Maurice Blackburn Lawyers, and the action is being funded by Bentham IMF Ltd (IMF). Class registrations and member services are conducted by Financial Redress Pty Ltd, a subsidiary of IMF. The Federal Court has ordered that this notice be published for the information of persons who might be members of the class on whose behalf the action is brought and may be affected by the action. You are a class member if at any time prior to 16 December 2011 you were a customer of NAB, held and operated banking facilities with NAB, and were charged by NAB one or more of the following fees: Personal Transaction Accounts (a) Reference Fee (b) Dishonour Fee - Outward (c) Periodical Payment Dishonour Fee Business Transaction Accounts (d) Reference Fee (e) Dishonour Fee - Outward (f) Irregular Account Fee (g) Periodical Payment Dishonour Fee Personal Credit Card Accounts (h) Late Payment Fee (i) Overlimit Fee If you are a class member, you should read this notice very carefully. Any questions you have concerning the matters contained in this notice should not be directed to the Court. If there is anything in it that you do not understand, you should seek legal advice. This notice is part of a court-ordered process to assist the parties to attempt to resolve this proceeding by settlement. In order to do that, the parties need to know how many class members would participate in any settlement of the proceeding, and the potential value of their claims. Class members wishing to participate in any potential settlement of the proceeding must register their claims by 4.00 pm on 27 January 2015. If you do not register, you may lose any rights you have to compensation. 2. What is a class action? A class action is an action that is brought by one or more persons (the Applicants) on their own behalf and on behalf of a group of people (class members) against another person (the respondent, in this case NAB) where the Applicants and the class members have similar claims against the respondent. Class members in a class action are not individually responsible for the legal costs associated with bringing the class action. In a class action, only the Applicants or their litigation funder are responsible for the costs. Class members are bound by any judgment or settlement entered into in the class action unless they have opted out of the proceeding. This means that: (a) if the class action is successful, class members may be eligible for a share of any settlement monies or Court-awarded damages; (b) if the class action is unsuccessful, class members are bound by that result; and (c) regardless of the outcome of the class action, class members will not be able to pursue their claims against NAB in a separate legal action unless they have opted out. 3. What is Opt Out? The Applicants in a class action do not need to seek the consent of class members to commence a class action on their behalf or to identify a specific class member. However, class members can cease to be class members by opting out of the class action. An explanation of how class members are able to opt out is found below in the section headed "How can you opt out of the action". 4. What is this class action? This class action, the NAB Bank Fees Class Action, is brought by the Applicants on their own behalf and on behalf of all persons who are "class members" as defined in the action. The Applicants allege in the Further Amended Statement of Claim in Federal Court action VID 1459 of 2011 that NAB charged its customers certain fees (as listed above in Section 1 of this Notice) on personal and business transaction accounts and personal credit card accounts, which were unlawful because, amongst other reasons, they were not a genuine agreed pre-estimate of the loss suffered by NAB as a result of the events giving rise to the charging of the fees, and because they were unconscionable, unfair or unjust. The respondent to the class action is NAB. NAB denies the allegations and is defending the class action. A similar class action has been commenced by other persons against Australia and New Zealand Banking Group Ltd (ANZ), in relation to similar fees charged by ANZ. In that class action, the judge found that late payment fees charged by ANZ on personal credit card accounts were unlawful, but that other fees charged by ANZ on personal and business transaction accounts and personal credit card accounts were not unlawful. Both the applicants in that case and ANZ have appealed the judge's decision, and are awaiting judgment on the appeal. 5. Are you a class member? You are a class member if at any time prior to 16 December 2011 you were a customer of NAB, held and operated banking facilities with NAB, and were charged by NAB one or more of the fees listed above in Section 1 of this Notice. If you are unsure whether or not you are a class member, you should contact Financial Redress Pty Ltd on 1300 473 373 or seek your own legal advice without delay. 6. Will you be liable for legal costs? You will incur no liability for legal costs simply by remaining as a class member, or by registering to participate in any settlement. The NAB Bank Fees Class Action is funded by IMF. This means that IMF has agreed to pay all the legal and other costs associated with the action, including any adverse costs orders. Accordingly, if the class action is unsuccessful, class members will have no liability for legal costs. If, however, the class action is successful and you ultimately receive compensation, then you will be liable for the following costs, which will only be payable by way of a deduction from your compensation amount, and not otherwise: (a) a commission to IMF equal to 25% of your settlement or award (resolution sum); (b) a share of the Applicants' costs in conducting the proceeding, which will be apportioned between class members in proportion to the amount each class member receives in compensation. Under no circumstances will class members be required to pay more in legal costs and commissions than they receive in compensation. Please note, you will be required to pay any costs you incur on your own behalf, including legal advice you choose to obtain from lawyers other than Maurice Blackburn Lawyers. 7. What will happen if you choose to remain a class member? Unless you opt out, you will be bound by the outcome of the class action, and unless you take one of the two steps referred to in the Important Notice below, you will lose any right to receive compensation or pursue separate action on the same claims. If the class action is successful, you may be entitled to share in the benefit of any order, judgment or settlement in favour of the Applicants and class members. (In some cases you may have to satisfy certain conditions before your entitlement arises, such as providing sufficient information to enable the accounts on which you were charged relevant fees to be identified, and therefore the amount (if any) of your compensation entitlement to be determined.) If the action is unsuccessful or is not as successful as you might have wished, you will not be able to sue on the same claim in any other action. 8. How can you remain a class member? If you wish to remain a class member, and to participate in any future settlement of the NAB Bank Fees Class Action (subject to an assessment that you have a valid claim), then you need to register by no later than 4.00 pm on 27 January 2015, in order for you to receive a distribution from any amount agreed in settlement of the action. You can register: on the website of Financial Redress Pty Ltd (www.financialredress.com.au); or by completing the attached "Registration Form – NAB Bank Fees Class Action" and mailing it to Financial Redress Pty Ltd at the address shown on the form. 9. How can you opt out of the class action? If you do not wish to remain a class member you must opt out of the class action. If you opt out you will not be bound by or entitled to share in the benefit of any order, judgment or settlement in the class action, but you will be at liberty to bring your own claim against NAB, provided that you issue Court action within the time limit applicable to your claim. If you wish to bring your own claim against NAB, you should seek your own legal advice about your claim and the applicable time limit prior to opting out. If you wish to opt out of the class action you must do so by completing an "Opt Out Notice" in the form attached, then returning it to the Registrar of the Federal Court of Australia at the address on the form. IMPORTANT: the Notice must reach the Registrar by no later than 4.00 pm on 27 January 2015, otherwise it will not be effective. You should submit the Opt Out Notice if you qualify as a class member and you wish to opt out of the class action. Each class member should fill out a separate form. If you are opting out on behalf of a company or business please provide your name, the name of the company or business and your position within the company or business (e.g. director or partner). IMPORTANT NOTICE: If you are a class member who has not already registered to participate in the NAB Bank Fees Class Action on the website of Financial Redress Pty Ltd (www.financialredress.com.au), and you do not either: (a) register to participate in the NAB Bank Fees Class Action on the website of Financial Redress Pty Ltd (www.financialredress.com.au) or by completing the attached "Registration Form – NAB Bank Fees Class Action" and mailing it to Financial Redress Pty Ltd at the address shown on the form; or (b) complete and return to the Registrar of the Federal Court of Australia an "Opt Out Notice" form, by 4.00 pm on 27 January 2015, you will remain a class member for all purposes, and will be bound by any resolution in the NAB Bank Fees Class Action, but, subject to further order of the Court, will not be entitled to participate in the distribution of any future amount agreed in settlement of the NAB Bank Fees Class Action. 10. Where can you obtain copies of relevant documents? Copies of relevant documents, including the Further Amended Originating Application, the Further Amended Statement of Claim and the orders of the Court regarding this Notice may be obtained by downloading them from www.mauriceblackburn.com.au or www.financialredress.com.au. Please consider the above matters carefully. If there is anything of which you are unsure, you should contact Financial Redress Pty Ltd on 1300 473 373 or email info@financialredress.com.au or seek your own legal advice. You should not delay in making your decision. Registration Form – Nab Bank Fees Class Action IMPORTANT NOTICE: If you wish to register to participate in the NAB Bank Fees Class Action, and have not previously registered to participate, you can register electronically on the website of Financial Redress Pty Ltd (www.financialredress.com.au) or by completing and mailing this form. If you wish to register by completing and mailing this form, please ensure that the details referred to below are completed, and that the completed form is mailed to Financial Redress Pty Ltd, PO Box Z5106, Perth WA 6001 in sufficient time for it to be delivered to that address by 4.00 pm on 27 January 2015. If your completed form is not received by that time, you may not be eligible to participate in any future settlement of the NAB Bank Fees Class Action. If you have more than one 'NAB ID' number, you will need to lodge a separate form for each 'NAB ID' number. For example, if you have a personal transaction account and a personal credit card account under the same 'NAB ID' number, you need only lodge one form. If, however, you have those accounts plus a business transaction account under a separate 'NAB ID' number, you will need to lodge separate forms for each separate 'NAB ID' number. 1. Name of Person Lodging Form ………………….. (Mr / Mrs / Ms, etc) ………………………………………………………………………….. Full Name 2. Contact Information Mailing Address (include state and postcode): …………………………………………………………............ ……………………………………………………………………………………………………………….. Telephone No: …………………………………………………………………………………………….... Email Address: ……………………………………………………………………………………………... YOU MUST PROVIDE YOUR NAB ID OR ACCOUNT NUMBERS TO REGISTER 3. NAB Identification Number (This is known as your "NAB ID" and is the account-holder's 8 to 10-digit identification no. assigned by NAB. The number is recorded on the back of your NAB transaction account card or credit card in the top left hand corner. If you are unable to provide your "NAB ID", please provide your account number(s) on the reverse of this form.) …………………………………………….. 4. Name of Account-Holder(s) (This is the name of the person(s) or entity(ies) in which the account was held, and whose name(s) appeared on the account statements. If it is the same as the 'Name of Person Lodging Form' specified above, write 'As Above'.) ……………………………………………………………………………………………………………………………. 5. Type(s) of Account Held With NAB (please tick) [ ] Personal Transaction Account(s) [ ] Personal Credit Card Account(s) [ ] Business Transaction Account(s) 6. Account Numbers (Complete this section only if you have not provided your NAB Identification Number at Item 3 on the reverse side of this page.) Account Number Account Type (please include BSB number) (Personal Transaction Account / Personal Credit Card Account / Business Transaction Account) Form 21 Rule 9.34 Opt out notice VID 1459 of 2011 Federal Court of Australia District Registry: Victoria Division: General STEVEN HAROLD FRANCIS FAREY and others Applicants NATIONAL AUSTRALIA BANK LTD (ACN 004 044 937) Respondent To: The Registrar Federal Court of Australia Victoria District Registry Owen Dixon Commonwealth Law Courts Building 305 William Street, Melbourne Vic 3000 ……………………………….. (insert name), a group member in this representative proceeding, gives notice under section 33J of the Federal Court of Australia Act 1976, that I am opting out of the representative proceeding. Date: Signed by (insert name) Group Member / Lawyer for the Group Member Filed on behalf of (name & role of party) Prepared by (name of person/lawyer) Law firm (if applicable) Tel Fax Email Address for service (include state and postcode) . [Version 2 form approved 9/10/13] Annexure D FEDERAL COURT OF AUSTRALIA NOTICE TO CLASS MEMBERS NAB Bank Fees Class Action (Farey & Ors v National Australia Bank Ltd – Federal Court Proceeding VID 1459 of 2011) The Federal Court of Australia has ordered that this notice be published for the information of persons who might have claims affected by this class action. If at any time prior to 16 December 2011 you were a customer of National Australia Bank Ltd (NAB), held and operated banking facilities with NAB, and were charged by NAB one or more of the types of fee listed below, you may be a class member and may be eligible to participate in this class action. The relevant fee types are: For Personal Transaction Accounts: Reference Fee; Dishonour Fee - Outward; Periodical Payment Dishonour Fee For Business Transaction Accounts: Reference Fee; Dishonour Fee - Outward; Irregular Account Fee; Periodical Payment Dishonour Fee For Personal Credit Card Accounts: Late Payment Fee; Overlimit Fee If you are a class member and wish to participate in any settlement of this class action, and have not previously registered with Financial Redress Pty Ltd to participate in this class action, you must register by 4.00 pm on 27 January 2015. If you have previously registered with Financial Redress Pty Ltd to participate in this class action, you need not take any action at the present time. If you are a class member but do not wish to remain as a class member (whether or not you have previously registered with Financial Redress Pty Ltd to participate in this class action), you must complete and return to the Court an Opt Out Notice by 4.00 pm on 27 January 2015. If you are a class member who has not previously registered to participate in this class action, and you take no action by 4.00 pm on 27 January 2015, you may lose any right to receive compensation or pursue separate action on the same claims. For more information, including registration and opt out forms, please visit www.financialredress.com.au or www.mauriceblackburn.com.au, or contact Financial Redress Pty Ltd on 1300 473 373 or email info@financialredress.com.au. Annexure E FUNDING AGREEMENT Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1159 of 2011 BETWEEN: STEVEN HAROLD FRANCIS FAREY First Applicant SUSAN ANN FAREY Second Applicant FAREY ENTERPRISES PTY LTD ACN 088 629 627 Third Applicant AND: NATIONAL AUSTRALIA BANK LTD ACN 004 044 937 Respondent JUDGE: JACOBSON J DATE: 18 NOVEMBER 2014 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) (the Act). It is one of several such proceedings which have been commenced by clients of Maurice Blackburn in this Court against various banks seeking relief in relation to certain fees that are commonly described as exception fees. 2 Those fees were commonly charged by banks and in the case of some banks, although apparently not in the case of the present respondent (the NAB), continue to be charged. The grounds upon which the levelling of those fees are challenged in the various proceedings are that they constitute penalties at law and in equity, are unconscionable and are in contravention of various statutes in that they are unfair contracts within the meaning of the Fair Trading Act 1986 (Vic) and its analogues and/or are said to be unjust transactions within the meaning of the Consumer Credit Code. 3 Each of the proceedings was commenced as a "closed class" proceeding. The essential purpose of the present application is to open the class for a short period of time and then to close it, so as to facilitate settlement negotiations which are presently on foot. I will refer to this in a little more detail later. 4 The other proceedings which have been commenced in the Court are referred to in the affidavit of Mr Andrew John Watson which was read in support of this morning's application. This proceeding and each of the other proceedings referred to in Mr Watson's affidavit has now been allocated to the docket of Gordon J and, other than one proceeding known as the "Paciocco" proceeding brought against the ANZ Bank, is presently stayed or adjourned pending the outcome of the Paciocco proceeding. 5 The Paciocco proceeding was heard by Gordon J in December 2013 and her Honour's reasons for judgment were handed down on 5 February 2014. Her Honour found that fees described as the "late payment fees" charged by the ANZ Bank were penalties at law and in equity. However, her Honour held that none of the other exception fees were penalties at law or in equity or were otherwise within the claims that were made by the applicant in that proceeding. Her Honour's orders are subject to an appeal, but the Full Court has reserved its judgment. 6 Prior to the commencement of each of the proceedings, potential group members were invited primarily by way of media publicity to register and participate as group members in the proceedings on the website of a company known as Financial Redress Pty Ltd which is a wholly owned subsidiary of the funder of the proceeding, Bentham IMF Limited (formerly IMF (Australia) Limited) which I will describe as "IMF". In the course of the registration process, each group member entered into a funding agreement with IMF to fund their participation in the proceedings. The group members on behalf of whom the proceeding is brought are described on page 58 of Mr Watson's affidavit. They are those persons who: (a) "at some time prior to the date of this application: (i) were customers of the respondent, NAB; (ii) held and operated banking facilities with NAB; (iii) were charged by NAB Exception Fees (as that term is defined in the accompanying Statement of Claim); and (b) are listed in compact disks which comprise Schedules B and C to this application." 7 It is the description of those persons referred to in the compact disk which has the effect of closing the class and in today's application the applicants and the NAB consented to the filing of a proposed further amended statement of claim which would remove the requirement set out in para (b) above. The criterion referred to in that paragraph is referred to as the registration criterion. The terms of the funding agreement are relevantly set out in paragraph 12 of Mr Watson's affidavit and I need not repeat them. 8 It is a term of the funding agreement that, in the event of a settlement of the proceeding, each group member is to pay to IMF an amount equal to the group member's share of the moneys paid by IMF in respect of the cost of the proceeding and an amount equal to 25% of the resolution sum, that amount being the funder's commercial premium for taking the risk of funding the proceeding. There have been a number of attempts to settle the proceeding but it is plain that, in order to achieve a settlement, the NAB wishes to avoid the potential exposure to a multiplicity of further representative actions. That is a risk which is inherent in the nature of a closed class but is one which can sometimes be an impediment to settlement negotiations or to the resolution of proceedings in a commercial way. 9 The orders which are sought this morning in order to assist the parties to be able to negotiate a settlement are described in Mr Watson's affidavit. The orders include the fixing of a date for group members to opt out of the proceeding in accordance with s 33J of the Act and various ancillary orders. The opt out date is proposed to be 27 January 2015. In addition, an order is sought that any group member who wishes to participate in any settlement of the proceeding, and who has not already registered to do so, must register on the website of Financial Redress Pty Limited by 27 January 2015. The purpose of this order, of course, is to enable the parties to know precisely how many group members will participate in any settlement and the total amount of the claims of those group members. 10 Importantly, the orders that are sought also include an order to the effect that any group member who neither opts out nor registers to participate in the proceeding by a certain date will remain a group member for all purposes and will be bound by any resolution of the proceeding but, subject to further order, shall not be entitled to receive a distribution from any amount agreed in settlement of the proceeding. 11 I am satisfied that I have power to make the class closure orders under s 33ZF of the Act. The authorities establish that that section is to be broadly construed: see McMullin v ICI Australia Operations Pty Limited (1998) 84 FCR 1 at 4. See also Courtney v Medtel Pty Limited (2002) 122 FCR 168 at [48]-[49]. In addition, orders in similar terms have been made in a substantial number of other representative proceedings. I referred to some of the authorities in Inabu Pty Limited v Leighton Holdings Pty Limited [2014] FCA 622 at [17]. In most of the other cases the class closure orders were sought in conjunction with, or ancillary to, an application to the Court under s 33V of the Act to approve a settlement. 12 In the present case the orders are sought at an earlier time. The orders, as I have said, in this case are sought for the essential purpose of facilitating settlement negotiations which have not yet been brought to fruition. However, I do not see that that precludes the exercise of the wide power under s 33ZF. It seems to me to be a matter for the discretion of the Court. 13 The authors of Class Actions in Australia (2nd ed) point at [14.410] to the need for respondents in a case such as this to identify all group members so that any settlement payment is "capped" by reference to a precise number of potential claimants and to ensure finality to the proceeding including limiting exposure to future claims. It is that consideration which, in my opinion, informs the exercise of the power in the present case. 14 It is true that a well-known commentator on representative actions, Professor Vince Morabito, has criticised this approach as failing to pay sufficient regard to the opt out model adopted by Pt IVA of the Act. However, in my opinion, the approach which is proposed by the parties this morning is not inconsistent with Pt IVA and is well supported by the authorities to which I referred in Inabu and also by the large number of authorities described by the authors of Class Actions in Australia at [14.430] and following. As I have said, the issue is one for the discretion of the Court. 15 Bromberg J in Winterford v Pfizer Australia Pty Limited [2012] FCA 1199 declined to make a class closure order. His Honour considered that there should be some compelling reason for the Court to do so. 16 In Winterford the application was made at a very early point in the proceeding and the considerations which arise this morning were not in issue. I therefore consider that the decision in that case is distinguishable from the present case. What seems to me to be critical is that all of the current and potential group members be properly informed of their rights and the potential impact on those rights by means of notices approved by the Court. 17 This morning's application seeks the Court's approval for notices to be sent to group members and one of the notices is, of course, an opt out notice as required by s 33J. The form of notice set out in Annexure B to the draft orders is intended to be sent to all persons who have previously registered with Financial Redress Pty Limited to participate in the representative proceeding. Those persons have, accordingly, provided their relevant details to the solicitors for the applicants and the notice is in a form which, in my opinion, sufficiently describes the necessary matters including the opt out date of 27 January 2015. 18 It may be unlikely that persons who have already taken the trouble to register would wish to opt out. Nonetheless, they are required to be given that opportunity and the notice does so. The second notice is in the form of Annexure C to the draft orders. It is intended to be sent to all persons who have not previously registered with Financial Redress Pty Limited but are group members as defined in the proposed further amended statement of claim. What is important is that those group members are informed clearly of the need to register by 27 January 2015 or to opt out by that date. 19 A combined notice in that form has been approved in other proceedings. See, for example, Harrison v Sandhurst Trustees Limited [2011] FCA 541 at [26]. In particular, what is also important is that those group members will be informed in clear terms that if they do nothing, that is to say, if they neither register nor opt out they will be bound by the outcome of the class action and will, subject to any further order of the Court, not be entitled to participate in the distribution of any future amount agreed in settlement of the proceeding. 20 It is, of course, also important that all group members be given proper notice of their rights. The procedure which is proposed includes advertisements and publication of notices. That is in accordance with the approach taken in a large number of well-established authorities. However, I raised with senior counsel for NAB the question of whether steps should be taken to try to notify all customers who fall within the definition of group members. Whilst I do not have evidence before me this morning, it is apparent that there are a large number of accounts that are potentially affected and I accept that there would be technical difficulties and expense in seeking to obtain details of all of the customers of the bank who fall within the definition of group members. 21 It is clear that when the proceedings were commenced there was a substantial amount of publicity obtained by or through the efforts of Financial Redress Pty Limited. Moreover, the proceedings and related actions have been the subject of extensive publicity including media attention during the past week which has made reference to the settlement negotiations. The notices which will be sent and the advertisements which will be placed will be effected at a time which is in close proximity to the dates of the articles in the media. It therefore seems to me to be likely that group members will receive notice of the proposal and of the need to take the positive step of registering or opting out by the specified date. 22 I am therefore satisfied that I ought to make the orders which are sought this morning. I have discussed with counsel some minor amendments and those amendments will be incorporated in the final form of the order which I will make in chambers. I certify that the preceding twenty-one (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 24 November 2014