Procedural fairness in carriage dispute questioned

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This judgment concerned an application for leave to appeal, and if leave were granted an appeal, from the orders of the primary judge (Lee J) on 12 October 2023 in respect of the determination of carriage: Greentree v Jaguar Land Rover Australia Pty Ltd (Carriage Application) [2023] FCA 1209. The primary judgment concerned a multiplicity dispute between two competing proceedings (the Jennings proceeding or Jennings applicant and the Greentree proceeding or Greentree applicants) brought against Jaguar Land Rover Australia Pty Ltd in respect of allegedly defective diesel particulate filters.

Among the grounds of appeal advanced were that the primary judge erred:

• in ordering the Jennings proceeding be automatically stayed if the applicants, solicitors and funder in the Greentree proceeding provided an undertaking to match the funding model in the Jennings proceeding including because, the provision of an opportunity after the hearing and after judgment to the Greentree applicants to improve the terms of their funding model (but not the Jennings applicant) involved a lack of procedural fairness (procedural fairness ground); and

• in finding that that the ‘accumulated experience’ of the solicitors in the Greentree proceeding would enable the claims of class members to be advanced more efficiently and effectively than those claims would otherwise be advanced in the Jennings proceeding in circumstances where that finding was based on evidence not before the primary judge (or that the evidence before the primary judge provided no basis for a number of comparative conclusions).

During the hearing, their Honours sought submissions first in respect of only the procedural fairness ground and, upon hearing the parties, delivered judgment – forthwith – that leave to appeal should be granted and the appeal allowed. It was therefore unnecessary to hear submissions on the other grounds (and following an invitation by the Court the parties reached an in-principle agreement to consolidate, thereby obviating the need for the re-exercise of the discretion).

Notwithstanding the truncated hearing, the principles relevant to applications for leave to appeal are briefly summarised in the judgment (being well established and not being in dispute) including, briefly:

• an applicant for leave to appeal must usually show that in all the circumstances the decision proposed to be appealed is attended with sufficient doubt to warrant its reconsideration on appeal; and, supposing the decision to be wrong, substantial injustice to a party would result if leave were refused (these considerations being cumulative such that leave ought not to be granted unless each limb is made out): Décor Corp v Dart Industries Inc (1991) 33 FCR 397, 398-399; Rawson Finances Pty Ltd v Deputy Commissioner of Taxation [2010] FCAFC 139, [5]; and

• in respect of discretionary decisions, an applicant for leave to appeal will generally need to demonstrate that the doubts as to the correctness of the decision involve errors or matters of principle of the kind described in House v The King (1936) 55 CLR 499, 504-5. It will not be sufficient (including if the decision below is not discretionary in the House v The King sense, but instead evaluative) to merely demonstrate that the discretion could or even should have been exercised differently.

Turning then to the procedural fairness ground, their Honours concluded that:

[26] It was procedurally unfair for the primary judge to grant carriage to the Greentree applicants, and to stay the Jennings proceeding, by permitting the Greentree applicants to make a revised funding offer after the hearing, and without notice to the Jennings applicant such that the Jennings applicant had no opportunity to make submissions in relation to that, and no corresponding opportunity to revise their funding offer. The unfairness is clear given that the primary judge considered that the fact that the Jennings proceeding offered superior returns for group members was determinative. His Honour said that unless the Greentree applicants also capped their fees and funding costs at 25% of any aggregate settlement or judgment the Greentree proceeding would be stayed and the Jennings proceeding would go forward.

…

[31] Importantly, at no point in the hearing did the primary judge raise the possibility of an order such as Order 2, nor provide an opportunity to the Jennings applicant to be heard as to that. The Jennings applicant would have been perfectly justified in understanding that the Greentree applicants had no opportunity, nor any intention, to cap its legal and funding costs at 25% of any aggregate settlement or judgment. There was no opportunity for the Jennings applicant to make submissions in relation to a proposition that was not on the table.

Of note, their Honours were unpersuaded by (and critical of) the submission advanced on behalf of the Greentree applicants that his Honour “expressly contemplated and raised with the parties the possibility of the Greentree applicants altering their funding model after the hearing of the applications; indeed, his Honour specifically invited submissions as to whether that would be against principle for him to proceed in that way”. In their Honours’ view, this may have been a real answer to the Jennings applicant’s complaint as to the absence of procedural fairness, however, having regard to the transcript, that assertion of fact was unfounded and the submission (which was ultimately withdrawn) should not have been made.

Finally, their Honours indicated (for completeness) that no procedural unfairness had arisen in the way in which the primary judge took into account Gilbert + Tobin's successful conduct of the Toyota class action. Their Honours were not persuaded that the primary judge went beyond the evidence and the uncontested matters of public record in reaching the conclusion that he did in relation to Gilbert + Tobin's superior experience.

[Postscript: By way of orders dated 17 July 2024, Murphy J approved the terms of the proposed consolidation, the consolidated proceeding being Leah Maree Greentree & Ors v Jaguar Land Rover Australia Pty Ltd (NSD1010/2022).]

Jennings v Jaguar Land Rover Australia Pty Ltd [2024] FCAFC 62

Federal Court of Australia, Murphy, Thawley and Stewart JJ, 17 May 2024
Greentree Applicants’ Solicitors: Gilbert + Tobin
Greentree Applicants’ Funder: Balance Legal Capital II UK Ltd
Jennings Applicant’s Solicitors: Maurice Blackburn
Jennings Applicant’s Funder: Fortress Investment Group LLC
Respondent’s Solicitors: Clayton Utz 

AustLII link

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