International Mass Actions and Class Actions - B. Australia

Sections A and B of this chapter commence with a brief history and
background to each of the class action systems, and antitrust laws, of
Australia before section C sets out a more detailed analysis of the
principal features of each of the Australian class action systems.
Five cartel class actions have occurred in Australia and these are
summarized in Section D.
In section E we discuss the current issues in relation to c artel class
actions. We conclude the discussion of Australian law in section F,
highlighting the key differences between the competition regime in
Australia and the United States.
A. Brief Background to, and History of, Class Action Litigation in
The ability to bring class actions has existed in Australia since the
enactment of the Federal Court of Australia Amendment Act 1991 (Cth)
which provided for “representative proceedingsby inserting Part IVA
into the Federal Court of Australia Act 1976 (Cth). Part IVA commenced
on March 4, 1992.1
The class action in the Federal Court of Australia was a response to
the Australian Law Reform Commission (ALRC), Grouped Proceedings
in the Federal Court, Report No 46 (1988) and to limitations of the
representative action procedure derived from the English Courts of
The most common class actions taken to date under these provisions
are shareholder class actions, product liability actions and cartel actions.
In most instances, the cases proceed partially through the court process
before settling.
1. Class action regimes also exist in the Australian states of Victoria (Part
4A of the commenced in 2000 Supreme Court Act 1986 (Vic)) and New
South Wales. (Part 10 in the Civil Procedure Act 2005 (NSW)
commenced in 2011).
266 Class Actions Handbook
As a common law country, in addition to the legislation itself, case
precedent has been important in establishing certain details of how the
system operates. The peak court in the Australian judicial system, the
High Court of Australia has rarely considered the procedural aspects of
class actions with the majority of guidance coming from Full Court of
the Federal Court of Australia, which is the intermediate appeals court in
the federal system.
The High Court in Wong v Silkfield2 was asked to interpret a
requirement to commence a class action in section 33C, namely that the
claims of the group members gave rise to a substantial common issue of
law or fact. The High Court approached the interpretation of the new
statutory regime by first noting that Part IVA creates new procedures
and confers upon the Australian Federal Court new powersaimed at
overcoming the limitations of the representative action. Further, Part
IVA was not to be confined by matters not required by its terms or
context.3 On the specific issue before it, the High Court interpreted
substantial to mean real or of substance and not large,” “of special
significance,or having “a major impact on the litigation.This made
the commencement of class actions relatively easy.4 It also set the tone
for how to interpret the legislation.5
As explained below, there is no requirement for the court to approve
or certify the commencement of a class action. Rather, the respondent, or
the court acting on its own motion, can identify one of the reasons
specified in section 33N for why the class action should be discontinued.
As a result, applications pursuant to section 33N were a common step in
class actions. Guidance to section 33N was provided by the Full Federal
Court in Bright v Femcare Ltd.6 (In addition to interpreting section 33N
the Australian Federal Court’s general approach to class actions was
explained by Lindgren J:
2. Wong v Silkfield (1999) 199 CLR 255.
3. Wong v Silkfield (1999) 199 CLR 255 at [1], [12].
4. See discussion of the other commencement require ments in section 33C
5. See, e.g., Cash Converters International Limited v Gray (2014) 223 FCR
139 at [23] (interpreting section 33C); City of S wan v McGraw-Hill
Financial Inc (2014) 223 FCR 328 at [12] (interpreting section 33K);
Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers &
Managers Appointed) (In Liq) [2015] FCA 811 at [98] (interpreting
section 33ZF).
6. Bright v Femcare Ltd (2002) 195 ALR 574.
International Mass Actions and Class Actions B. Australia
18. .... [O]rdinarily one would expect that, in an attempt to give effect
to the legislative intention, a means will be sought, by case
management techniques, to enable a representative proceeding to
continue to the stage of resolution of the substantial common issues on
the basis that after that stage is completed, an order under s 33N or
directions under s 33Q will be made....
77. ... [L]et it be assumed that in respect of the resolution of each
womans claim, two thirds of the time to be spe nt will have to be
devoted to issues unique to that claim and one third to issues which are
common to all claims. Is it still not preferable that the co mmon issues
be heard and determined once so as to be binding as between each
claimant and the respondents rather than many times?7
The Full Federal Court signaled that rather than discontinue a class
action because it contained non-common issues or individual issues, the
class action would be allowed to proceed to resolve the common issues.
After that point, litigants could use section 33N to discontinue a class
action or directions could be given under section 33Q for the use of sub-
groups, individual trials, or other directions such as test cases. Single
judges of the Federal Court of Australia have used this approach at
various times, but the approach was now endorsed by an appellate court.
The Australian High Court’s other key decision was about litigation
funding. In Campbell’s Cash and Carry Pty Ltd v Fostif Pty Ltd8 the
High Court, by a majority, held that litigation funding was not an abuse
of process or contrary to public policy. The joint judgment of Gummow,
Hayne, and Crennan JJ indicated that existing doctrines of abuse of
process and the courtsability to protect their processes would be
sufficient to deal with a funder conducting themselves in a manner
inimical to the due administration of justice.9 Gleeson CJ and Kirby J
agreed with the reasoning of the joint judgment.10 Callinan and Heydon
JJ dissented on this issue.11 Since 2006, a third party financing another
persons legal proceedings, including class actions, has been an accepted
practice in Australia.
The advent of litigation funding has affected the types of class
actions that are brought and the way in which a class is structured. In
7. Bright v Femcare Ltd (2002) 195 ALR 574 at [18], [77].
8. Campbell’s Cash and Carry Pty Limited v Fostif Pty Limited (2006) 229
CLR 386.
9. Id.
10. Id.
11. Id.

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