Federal Court of Australia Boulos v M.R.V.L Investments Pty Ltd (No. 4) [2023] FCA 274 File number(s): NSD 2168 of 2019 Judgment of: THAWLEY J Date of judgment: 27 March 2023 Date of publication of reasons: 29 March 2023 Catchwords: PRACTICE AND PROCEDURE – representative proceeding – interlocutory application seeking orders for further distribution of Notice to Group Members – application dismissed Division: Fair Work Division Registry: New South Wales National Practice Area: Employment and Industrial Relations Number of paragraphs: 31 Date of hearing: 27 March 2023 Counsel for the Applicant: Mr W Edwards SC with Mr O Nanlohy Solicitor for the Applicant: Adero Law Counsel for the Respondent: Mr R McHugh SC with Ms D Tang Solicitor for the Respondent Johnson Winter & Slattery ORDERS NSD 2168 of 2019 BETWEEN: RAYMOND BOULOS Applicant AND: M.R.V.L INVESTMENTS PTY LTD Respondent order made by: THAWLEY J DATE OF ORDER: 27 MARCH 2023 THE COURT ORDERS THAT: 1. The applicant's amended interlocutory application filed on 27 March 2023 is dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Revised from transcript) THAWLEY J: 1 On 21 December 2022, the Court made various orders by consent (December Orders). The December Orders were varied by orders made on 3 March 2023. The December Orders included an order referring the proceedings to mediation by 30 June 2023. 2 A mediation is scheduled to take place on 8 or 9 June 2023 or on both days. The December Orders also provided a regime to facilitate the mediation taking place by 30 June 2023: the orders provide a protocol to send the approved notice regarding mediation to group members (Distribution Protocol) with a deadline for group members to register for mediation by 4:00pm on 27 February 2023 (Registration Deadline); the respondent is to provide to the applicant certain data of registered group members (Mediation Data) by 21 April 2023; and the applicant is to prepare and provide to the respondent a model quantifying alleged damages by 5 May 2023. 3 Since the making of the December Orders, group members who satisfied the relevant criteria have been sent the approved notice either via email, post or a text message containing a link to the notice (collectively, the notices). 4 The December Orders provide for registration after mediation of additional group members to participate in any settlement. Orders 26 to 28 provide: 26. Pursuant to s 33ZF of the FCA Act, any group member who has not opted out of these proceedings, and is not on the Mediation Registered Group Member List, but who registers to participate in accordance with Order 27 of these Orders is an "Additional Registered Group Member". 27. Any group member who wishes to register as an Additional Registered Group Member to participate in any settlement must register, by a deadline to be determined at a later date, which is to occur after the parties have attended mediation (Final Registration Deadline), in a process to be determined at a later date. 28. Pursuant to s 33ZF of the FCA Act, all group members on the Mediation Registered Group Member List and the Additional Registered Group Members will be a participant in any settlement agreed prior to a trial, in the event that it receives approval by the Court. 5 The Distribution Protocol provided for the approved notices to be sent to unregistered group members as follows: by 9 January 2023, the "Mailing Service" – a third party mailing service provider – was to email the approved notice to each unregistered group member for whom the respondent holds an email address, and a reminder email was to be sent by 10 February 2023; by 20 January 2023, where the Mailing Service received notification that the email was not or may not have been delivered, the Mailing Service was to post the approved notice to those unregistered group members for whom the respondent holds a postal address; by 9 January 2023, the Mailing Service was to post the approved notice to each unregistered group member for whom the respondent does not hold an email address, but does hold an Australian postal address; and by 23 January 2023, the Mailing Service was to send a text message to each unregistered group member for whom the respondent holds a mobile phone number, and a reminder text message to be sent by 24 February 2023. 6 The respondent's list of potential group members identified 14,428 individuals. The list contained the postal address of each potential group member, the email addresses of 14,239 potential group members, and the Australian mobile phone number of 14,327 potential group members. 7 After removing 343 entries as "duplicates and suppressions" and those who had opted out, the Mailing Service identified 14,085 potential group members to receive the notices in accordance with the Distribution Protocol. 8 The Mailing Service sent the approved notice to those 14,085 people as follows: (a) by email on 9 January 2023 to 13,902 recipients; and (b) by post on 10 January 2023 to 183 recipients. 9 In relation to the emails, 653 of them "bounced". In accordance with the Distribution Protocol, on 16 January 2023, the Mailing Service sent the approved notice to those 653 individuals by mail. 10 On 10 February 2023, 12,343 emails were sent and 22 bounced. 11 Text messages were sent on 23 January 2023 and 24 February 2023. Given the correlation between the number of potential group members for whom an Australian mobile phone number was given and for whom an email address was held, it follows that a very large proportion of those potential group members with an email address were also sent two text messages. 12 By an amended interlocutory application filed in court today, the representative applicant, Mr Boulos, seeks, in summary: 1. an extension of time in order 9 of the December Orders, such that group members in the proceeding may register by 11:59pm on 8 May 2023 for the purposes of having their claims considered in the mediation scheduled to be held on 8 and 9 June 2023; 2. orders for distribution by mail and text message to unregistered group members of the Notice to Group Members, as defined in order 11 of the December Orders, within 4 days of the date the order is made; and 3. orders requiring the respondent to provide further Mediation Data, after the applicant has provided the respondent with the List of Registered Group Members (constituting both the group members who registered by 4:00pm on 27 February 2023 and the currently unregistered group members who register by 11:59pm on 8 May 2023). 13 The issues which the applicant raises arise in the following way. The Distribution Protocol has been complied with. All group members have been sent the approved notice by one or more of the methods contemplated, namely email, mail or a text message containing a link to the approved notice. Approximately 2,149 group members have registered for the mediation. 14 The applicant is concerned that emails were "not received in the general inbox and subsequently not viewed by the group members" or that there has been a deficiency in the distribution process which has resulted in the approved notice not coming to the attention of a large number of group members, essentially because, according to the applicant, it is likely that many emails were received into a "junk" or "spam" email folder, rather than the general inbox of the relevant recipient. The applicant submitted that, of the 13,902 emails sent on 9 January 2023 by the Mailing Service, some 3,109 emails were opened and a further 10,793 were received but not opened. 15 The evidence provides no detailed explanation as to how the Mailing Service is able to identify whether an email has been read or opened. The evidence was that the Mailing Service cannot identify when a person opens an email on the person's mobile phone. The group members were employed in the hospitality industry and it might be expected that many of them regularly use mobile devices to access emails. 16 The evidence also indicates that discussions between the applicant and the Mailing Service, which occurred before the final form of the Distribution Protocol was agreed, revealed "the general unreliability of read receipts and any program [the Mailing Service] use to track whether someone has read an email". 17 On this application, the applicant relied on a survey conducted by the litigation funder, ICP. This surveyed group members who had registered through the online registration form. 177 registered group members responded to the survey. About 75 out of the 177 group members received the notices in the junk email folder. It should be noted that those 75 individuals had registered by the Registration Deadline, notwithstanding that the notices were received in the junk email folder. It would seem likely that those individuals either read the email received in the junk email folder or responded to a later text message. 18 Recognising the limitations in this survey evidence, in particular that it surveys about 1% of potential group members, I will proceed on the basis that it is likely that a number of emails were received into a folder other than the general inbox of a recipient. It does not follow from this that those people did not read the email. More importantly, it is likely that those people who received an email also received two text messages. 19 The evidence indicated that there was a "spike in registrations" after text messages were received. In his affidavit, Mr Markham made the following observation: 22. From my professional experience, I am aware that group members of a similar age demographic to the group in this proceeding have been responsive to updates and 'calls to action' provided via text message. I am also aware, from discussions with an employee on the data exports of the registration forms provided by ICP, that there was a significant spike in registrations following the Mailing Service sending an SMS text message to group members … 20 I will address the text messages first. As noted earlier, two text messages have already been sent. There was no suggestion that the text messages have not been received. The applicant submitted: Where there is at least some concern held by group members that the Notice was spam or a scam, the fact that it arrived by unsolicited text message from an unknown number is unlikely to allay any concerns. 21 This submission proceeds on the basis that the recipient of the email in the junk or spam folder has in fact read the email and so does not address the position of those who did not. Those who did not read the email because they did not look in the junk or spam folder would only have had the text message drawn to their attention. In any event, I do not accept the submission. I do not think the typical recipient of one or both of the text messages would have assumed the text message was a scam or spam even if they had earlier received the email into a folder other than the general inbox. 22 Further, even if recipients did treat the first two text messages as a scam or spam, there is nothing about the text message now proposed to be sent as a third text message which would alter this position. 23 I am not satisfied that the sending of a third text message to the same telephone numbers to which text messages have already been sent is warranted. 24 I turn then to distribution by post to those people to whom emails have already been sent. As mentioned, the group members were employees in the hospitality industry. A number of group members were visa holders. In his affidavit, Mr Markham gave the following evidence: 40. I am … aware from causing my employees to interview a number of group members, during various due diligence phases of the proceedings that a significant portion of contacted group members, who were employed on a visa have since returned to their home countries. 25 The postal addresses held by the respondent are in some cases 10 years old, but in others more recent. It is likely that a large number of postal addresses are no longer current. There is force in the respondent's submissions that group members are more likely to have maintained their mobile phone numbers than their residential addresses. The same submission could be made about email addresses. It does not seem particularly likely that a letter will succeed in drawing the recipient's attention to the existence of the proceedings in circumstances where emails and texts have not. I note in this regard that the proceedings have received a substantial amount of publicity. 26 It does not seem to me that further distribution by post is warranted. The potential advantage in further notifying group members should be assessed against the potential delay it may cause and the benefit to the 2,149 group members and the respondent, who have thus far proceeded on the basis that the mediation will take place, and the proceedings may be resolved, by June 2023. 27 The parties have been operating on the basis that the mediation will take place as scheduled in early 30 June 2023. The approved notice advised group members that "there will be a mediation in the class action by 30 June 2023". That is what those who have registered are expecting. If the orders sought by the applicant are granted, the mediation will not be able to take place by June 2023, although it will be achievable by the end of August 2023. 28 The likelihood of additional group members registering on an extended deadline seems to me to be low, on the evidence before the Court. 29 Further, group members who did not register for mediation by the Registration Deadline, are afforded a further opportunity to participate in any settlement by registering their interest at a future date to be determined. The applicant submitted that, given unregistered group members who are not on the Mediation Registered Group Member List are entitled to register to participate in a settlement, should one be reached at the mediation, it would be inimical to a productive mediation for a situation to continue where it is clear that a substantial number of potential group members may come forward to participate in settlement after the mediation has proceeded on the basis of an inadequate data set, because they have not received the Notice to participate as registered group members for the purposes of the mediation. It was submitted that this situation would increase the risk of dilution, and thereby the risk that any settlement reached would have to be rejected as unfair and unreasonable. The applicant submitted that the purpose of the December Orders had therefore miscarried. 30 In my view, contrary to the applicant's submission, it is not clear that a substantial number of potential group members may come forward to participate in settlement after the mediation has proceeded. The evidence indicates that notice to participate as registered group members for the purposes of the mediation has been received. Even if further potential members do come forward after mediation, it would not follow that the mediation has not served any useful purpose. If few come forward, then no serious issue presents itself. If a substantial number come forward such that any settlement reached at mediation is considered not fair and reasonable, the parties will have understood the sorts of parameters they could agree upon in relation to the smaller number such that a fair and reasonable settlement in relation to a larger number is more likely. 31 For these reasons, the applicant's interlocutory application is dismissed. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Thawley. Associate: Dated: 29 March 2023