Judge decides that cooperation between firms will address risk of increased costs of concurrent class actions

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This decision follows the previous decision of Lee J in CJMcG Pty Ltd atf the CJMcG Superannuation Fund v Boral Ltd (No 2) (2021) 389 ALR 699; [2021] FCA 350 (CJMCG Decision) concerning the carriage dispute in claims filed against Boral Ltd (Boral) by Andrew Parkin (represented by Maurice Blackburn), CJMCG Pty Ltd (represented by Quin Emanuel) and Martini Family Investments Pty Ltd (represented by Phi Finney McDonald) (PFM). 

In the CJMCG Decision, his Honour considered that the proceeding brought on a no-win-no-fee basis (i.e. the Parkin proceeding) was the best vehicle through which the claims should proceed. His Honour made orders to permanently stay the CJMcG proceeding, but stopped short of making a similar order in respect of the Martini proceeding. Instead, his Honour provided class members in the Martini proceeding with an opportunity to opt out of the Parkin proceeding – thus allowing those class members to remain part of the Martini proceeding if it was determined, after the opt out process, that the claim was able to proceed (see also ruling relating to opt out orders: Parkin v Boral Ltd (Opt Out Notices) [2021] FCA 478). 

Following the completion of the opt out process, his Honour was now faced with the issue of what should happen to the Martini proceeding and whether it should be temporarily stayed or adjourned.

The difficulties with either approach

Before confirming that he would allow the Martini proceeding to continue, his Honour summarised the potential difficulties that arose in relation to allowing both proceedings to continue on the one hand, and implementing an adjournment or temporary stay on the other. 

In relation to permitting both proceedings to continue, his Honour accepted evidence adduced by Boral regarding the potential for increased complexities (and as a result, increased costs) in cases involving multiple representative applicants with separate legal representation.

In considering the difficulties which might arise should the Martini proceeding be adjourned or temporarily stayed, his Honour highlighted the potential (albeit remote) risk that the Martini applicant, class members and/or Boral, could consider themselves “in a position to reagitate common issues” following the determination of the Parkin proceeding (see [15]-[30]). After considering authorities regarding whether parties in related proceedings may be bound to a decision in relation to common questions, his Honour concluded that the risk in the current proceedings was “vanishingly low” for both legal and practical reasons. 

Determination 

Owing primarily to a change in position by Boral on the day of the hearing, his Honour ultimately decided that the Martini proceeding should continue pursuant to a cooperation proposal whereby PFM and Maurice Blackburn would work collaboratively in relation to the conduct of the claims. The proposal included mechanisms such as the use of only one set of counsel, a single set of applicants’ experts and joint interlocutory applications. 

In deciding not to adjourn or temporarily stay the Martini proceeding, his Honour referred to the following key considerations: 

1. First and most importantly, Boral did not oppose the cooperation proposal. Had Boral actively supported the application for a temporary stay, his Honour noted that he “would likely have granted it” (at [33]). 
   
   
2. Second, the cooperation proposal appeared to provide a sensible way of addressing the risk of increased costs. 
   
   
3. Third, both sets of solicitors were highly experienced in Part IVA proceedings and had worked together previously.
   
   
4. Fourth, given the likelihood of the Martini proceeding settling at the same time as the Parkin proceeding, the legal representatives in the Martini proceeding (PFM) were likely to be better apprised of the relevant issues if they have had prior participation in the case (at [37]).
   
   
5. Finally, his Honour concluded that those who had opted to remain in the Martini proceeding were considered to have made an informed decision to do so.

Parkin v Boral Ltd (Temporary Stay) [2021] FCA 889

Federal Court of Australia, Lee J,
21 July 2021

Applicant’s Solicitors NSD602: Maurice Blackburn;
Applicant’s Solicitors NSD935: Phi Finney McDonald;
Respondents’ Solicitors: Herbert Smith Freehills;
Applicant’s Funder NSD935: Therium Litigation Finance Atlas AFP IC

Austlii Link: Accessible here

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