Opt Out orders taking shape in Victoria

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This was a judgment in the ‘flex commission’ class actions in respect of orders under ss 33J, 33X and 33Y of the Supreme Court Act 1986 (Vic) for opt out and claim registration. The parties had substantially agreed on the form of those orders, save for the consequences for failing to register (if any) and the manner in which notification should occur. It was not disputed that the Court has the power to make orders of the kind sought, but whether there is a proper basis for the exercise of the power, in the circumstances.

In respect of voluntary registration, the defendants (referred to collectively for the purposes of this summary though each defendant made submissions relevant to its own proceeding) sought ‘soft class closure’ orders to the effect that, while voluntary, class members who failed to register by a certain deadline would be precluded from seeking any benefit under an in-principle settlement achieved at (or as a consequence of) mediation. They contended that this would achieve greater certainty in respect of potential quantum, and that absent any such orders mediation would occur without any real parameters for estimating the claims. In particular, it was argued that without knowing how many class members are participating, the sheer number of class members in the proceedings would magnify the differences between the parties.

The plaintiffs opposed the making of the above orders and contended that the Court should provide for voluntary registration by class members without any consequence attending the failure to register. It was submitted that voluntary registration would be sufficient for assessing quantum for the purposes of mediation, and that class members should not be required to register until a settlement is on the table. Further, the plaintiffs submitted that:

a) in this case, the utility of knowing how many people wished to participate in the proceedings and thereby assisting the forthcoming mediations did not outweigh the prejudice that could be caused to class members who might be unintentionally excluded; and

b) in respect of potential quantum, the defendants have in any event all the data necessary to make an informed decision about the quantum of the claims.

Justice Nichols determined that it was appropriate to make the ‘soft class closure’ orders essentially in the form sought by the defendants. Her Honour was persuaded that ascertaining participation rates had a real prospect of making a material difference to the parties' ability to reach agreement on the quantum at stake in the proceedings. Her Honour was also persuaded that individually addressed notices (drawn from the defendants’ records) which informed recipients they had been identified as a class member in the proceedings would likely ameliorate confusion as to eligibility. Further, the parties agreed (subject to Court order) that the defendants would provide the solicitors for the plaintiff with access to a unique database with data relevant to the claims which would further assist in responding to class member enquiries.

Finally, the means by which the notice should be distributed to class members for whom an email address was not available was in dispute (which for each defendant was a majority and very significant number of class members). Her Honour found that as personal notice was to be given to class members, distribution must involve a number of channels: email in the first instance, followed by SMS for class members for whom there is no email address, then post where neither email nor SMS were available. In respect of costs, her Honour found that notification would benefit both parties in each case and it was therefore appropriate for both sides to share the costs of notification.

Fox v Westpac Banking Corporation [2023] VSC 414

Supreme Court of Victoria, Nichols J,
20 July 2023

Plaintiffs’ Solicitors: Maurice Blackburn
Defendants’ Solicitors: King & Wood Mallesons / Herbert Smith Freehills / Gilbert + Tobin
Plaintiffs’ Funder: N/A (Group Costs Order)

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