Wigmans v AMP Ltd

• Jurisdiction: Australia Federal only
• Judge: Kiefel CJ,Keane J.,Gageler,Gordon,Edelman JJ
• Judgment Date: 10 March 2021
• Neutral Citation: [2021] HCA 7
• Docket Number: S67/2020
• Date: 10 March 2021
• Court: High Court

[2021] HCA 7

HIGH COURT OF AUSTRALIA

Kiefel CJ, Gageler, Keane, Gordon and Edelman JJ

S67/2020

Marion Antoinette Wigmans

Appellant

and

AMP Limited & Ors

Respondents

Representation

J T Gleeson SC with A M Hochroth and P A Meagher for the appellant (instructed by Quinn Emanuel Urquhart and Sullivan)

E A Collins SC with I J M Ahmed for the first respondent (instructed by Herbert Smith Freehills)

C A Moore SC with G A Donnellan and J Entwisle for the second and third respondents (instructed by Maurice Blackburn Lawyers)

Civil Procedure Act 2005 (NSW), ss 56, 57, 58, 67, Pt 10.

Practice and procedure — Representative action — Stay — Where five open class representative actions commenced against same defendant in relation to same controversy — Where considerable overlap between claims made in proceedings — Where representative plaintiff in four proceedings filed notice of motion in Supreme Court of New South Wales seeking orders that each other proceeding be permanently stayed — Whether Supreme Court's power to grant stay is confined by rule or presumption that representative proceeding issued first in time is to be preferred — Whether litigation funding arrangements can be relevant consideration under s 67 of Civil Procedure Act 2005 (NSW) — Whether Supreme Court erred in considering litigation funding arrangements.

Words and phrases — “abuse of process”, “auction process”, “certification and carriage motion procedures”, “class actions”, “competing funding proposals, costs estimates and net hypothetical return to members”, “competing representative proceedings”, “conflicts of interest”, “contradictor”, “duplicative proceedings”, “equitable principles concerning test actions”, “first-in-time rule or presumption”, “funding model”, “litigation funding arrangements”, “multifactorial approach”, “multiplicity”, “one size fits all”, “power to grant a stay”, “prima facie vexatious and oppressive”, “representative proceedings”, “special referee”.

ORDER

• 1. Appeal dismissed.

• 2. The appellant pay the respondents' costs of the appeal to this Court.

1 Kiefel CJ AND Keane J. On 16 and 17 April 2018, executives of the first respondent (“AMP”) gave testimony to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to the effect that AMP had deliberately charged some of its clients fees for no service, and that it had misled the Australian Securities and Investments Commission as to the extent of this conduct. Following this testimony, there was a sharp fall in the price at which shares in AMP traded on the Australian Securities Exchange (“the ASX”).

2 Shortly thereafter, five open class representative proceedings were commenced in quick succession on behalf of shareholders in AMP who had made investments during periods of time in which the representative parties allege AMP ought to have disclosed to the market the information that emerged during the Royal Commission. All the representative parties sought compensation for loss caused by AMP's alleged breach of the continuous disclosure obligations imposed on it by the Corporations Act 2001 (Cth) together with the ASX Listing Rules. Misleading and deceptive conduct and statutory unconscionable conduct claims were also advanced.

3 The appellant, Ms Marion Wigmans, was first off the mark. On 9 May 2018, proceedings on her behalf were commenced in the Supreme Court of New South Wales. Seven hours later, Wileypark Pty Ltd (“Wileypark”) commenced proceedings in the Federal Court of Australia. Mr Andrew Georgiou did likewise on 25 May 2018, as did the third respondent (“Fernbrook”) on 6 June 2018 and the second respondent (“Komlotex”) on 7 June 2018. Each lead plaintiff or applicant was a group member in each of the other proceedings. The different proceedings were brought by a different lead plaintiff or applicant because different arrangements were made for the sponsorship of the proceedings by litigation funders or solicitors willing to act on a “no-win, no-fee” basis. The proceedings that had been commenced in the Federal Court were transferred to the Supreme Court 1. The Fernbrook proceedings were consolidated with the Komlotex proceedings (“the Komlotex/Fernbrook proceedings”) 2. Each of Ms Wigmans, Wileypark, Mr Georgiou and Komlotex applied to the Supreme Court for a stay of the proceedings in which the others were plaintiffs.

4 AMP, in the courts below and in this Court, was relevantly neutral as between the competing representative proceedings. Not surprisingly, however, it

supported an outcome in which it would face only one set of proceedings. The issue before this Court is as to the basis on which that outcome should be achieved

The primary judge

5 The primary judge (Ward CJ in Eq) ordered, ostensibly pursuant to ss 67 and 183 of the Civil Procedure Act 2005 (NSW) (“the CPA”) and the inherent power of the Supreme Court, that the proceedings of Ms Wigmans, Wileypark and Mr Georgiou be permanently stayed 3. While the primary judge exercised the power to stay proceedings conferred by s 67 of the CPA, the issue resolved by that order was as to which of the proceedings should be allowed to proceed. The answer to that question was ultimately found, not in the identification of a deficiency in each of the proceedings ordered to be stayed as a vehicle for the doing of justice between the plaintiffs and the defendant, but by an assessment as to which sponsor offered the prospect of the highest return to group members. Accordingly, the purpose and effect of the order made by the primary judge was to afford the solicitors acting for Komlotex and Fernbrook the exclusive opportunity to continue their proceedings for the benefit of group members.

6 The primary judge approached the determination of the four stay applications by an assessment of the relative potential benefits expected to flow to group members from each of the competing representative proceedings. Her Honour proceeded by reference to “case management principles” derived from the “overriding purpose” in s 56 of the CPA 4 using a “multi-factorial analysis” of the kind endorsed by the Full Court of the Federal Court in Perera v GetSwift Ltd 5. The primary judge identified as relevant the following eight factors drawn from the judgment of the Full Court in GetSwift 6 as well as that of Lee J at first instance in that case 7. They were 8:

• (1) the competing funding proposals, costs estimates and net hypothetical return to group members (assessed “having regard to standardised assumptions such as the likely length of trial” 9);

• (2) the proposals for security for AMP's costs;

• (3) the nature and scope of the causes of action advanced;

• (4) the size of the respective classes;

• (5) the extent of any bookbuild;

• (6) the experience of the legal practitioners (and funders) and availability of resources;

• (7) the state of progress of the proceedings; and

• (8) the conduct of the representative plaintiffs to date.

7 The primary judge concluded that Ms Wigmans' proceedings and the Komlotex/Fernbrook proceedings ought to be preferred to the proceedings of Wileypark and Mr Georgiou because of their superior proposal with respect to the provision of security for AMP's costs 10. Her Honour went on to hold that it was decisive as between the remaining two proceedings that the Komlotex/Fernbrook proceedings were to be “funded” by the solicitors acting for Komlotex and Fernbrook, Maurice Blackburn, on a “no-win, no-fee” basis with a 25 per cent uplift on professional fees if the resolution sum exceeded $80 million 11. This funding model was expected to produce a better net return for group members than that proposed for Ms Wigmans' proceedings. Ms Wigmans' proceedings, in which the solicitors Quinn Emanuel act for her, were to be funded by a commercial litigation funder on terms pursuant to which the funder stood to recover up to 20 per cent of any recovery 12.

The Court of Appeal

8 The Court of Appeal of the Supreme Court of New South Wales (Bell P, Macfarlan, Meagher, Payne and White JJA) dismissed Ms Wigmans' appeal 13. The Court of Appeal found no error in the reasons of the primary judge. The “only real point of difference” in reasoning between Bell P (with whom Macfarlan, Meagher, Payne and White JJA agreed) and the primary judge was that Bell P considered that, because a stay application ultimately turns on whether the ends of justice require such a remedy, it cannot aptly be said to be dictated by “case management principles” 14.

9 In the Court of Appeal, Bell P found particular guidance in McHenry v Lewis 15, a case concerned with two “representative proceedings” of the kind permitted by the Court of Chancery where more than one person had the same interest in a claim 16. Bell P considered that McHenry v Lewis anticipated the solution offered by GetSwift to the problem of modern competing representative proceedings with “remarkabl[e] similar[ity]” 17.

10 It will be necessary to consider more closely the considerations said by Jessel MR in McHenry v Lewis to be relevant to the solution of the problem posed by the pendency of multiple proceedings against the same defendant. For the moment, it is sufficient to observe that Bell P was clearly right to conclude that the order made by the primary judge was not supportable as an exercise in case management.

The appeal to this Court

11 Ms Wigmans submitted that the order made by the primary judge in accordance with the “multi-factorial analysis” endorsed in GetSwift was not authorised by s 67 or s 183 of the CPA or by the inherent power of the Supreme Court. Ms Wigmans urged instead that, where later-in-time proceedings have no discernible juridical advantage over the proceedings first commenced, the later proceedings should be stayed as vexatious in accordance with the settled approach

of the...