Self-represented applicant permanently stayed in Meta Platforms class action

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This was a class action against Meta Platforms, Inc (formerly Facebook, Inc) and Google LLC, on behalf of persons who were adversely affected by the respondents’ actions during the period between 29 January 2018 and about July 2018 when they each introduced measures which prohibited, or substantially restricted, advertising related to cryptocurrency and, more broadly, the cryptocurrency industry. 

The applicant, Mr Hamilton: 

• is self-represented (and although legally qualified, was not the solicitor on the record in the proceeding, and expressly denied that he was acting as a solicitor in conducting the proceeding); and 
• is the sole shareholder, the chief executive officer and one of two directors of the funder (JPB) (the other director being his mother) – JPB funded the proceeding by issuing ‘SUFB Tokens’ (itself a form of cryptocurrency) to persons who made financial and non-financial contributions to the litigation (at Mr Hamilton’s discretion, including to Mr Hamilton himself). 

The respondents applied for the proceeding to be permanently stayed, or alternatively an order that it not continue as a representative proceeding. They contended that to permit the proceeding to continue in its current form would bring the administration of justice into disrepute for two principal reasons: (i) first, Mr Hamilton is in an intractable position of conflict vis-à-vis class members such that continuation of the proceeding with him as representative applicant, sole shareholder and CEO and director of the funder, and without the benefit of legal representation, will bring the administration of justice into disrepute; and (ii) secondly, the manner in which Mr Hamilton’s interest in the proceeding has been structured involves him in, in substance, obtaining prohibited contingency fees through the issuance of ‘SUFB Tokens’ to him by JPB as a reward for his non-financial contributions to the litigation. 

In her reasons, Cheeseman J analysed in detail the complicated funding arrangements involving JPB, and the obvious conflicts that arose from Mr Hamilton’s multifaceted role in the proceeding, particularly as both representative applicant and funder. Although JPB had a ‘Conflict Management Policy’ in place, which was amended during the hearing to address some obvious deficiencies, nevertheless numerous deficiencies remained (not least of all the roles which it contemplated would be performed by the ‘Lawyers’ in the proceeding, notwithstanding that no lawyers had ever been (nor was it proposed that they would be) appointed to act in the proceeding). 

Her Honour also analysed (at [77]-[104]) the nature of the duties which a lead applicant owes to class members, concluding (at [83] and [104]) that “Mr Hamilton owes a duty to Group Members not to act in a way that is contrary to their interests in conducting the proceeding” (a duty which was only heightened in this case in the absence of a legal practitioner acting in the case, and which Mr Hamilton could not discharge in circumstances where he was, in substance, also the funder). 

Given the pervasive (and intractable) conflicts of interest arising from Mr Hamilton’s multiple roles and interests, her Honour ultimately concluded that the proceeding should be permanently stayed (but without prejudice to the right of class members to pursue their claims in a separate (and properly structured) proceeding. Her Honour summarised her conclusions as follows: 

[12] To permit the proceeding to continue in the current form would bring the administration of justice into disrepute. Although Mr Hamilton sought to advance a number of ways in which the proceeding may be managed so as to mitigate the issues identified by the respondents, I am not satisfied that the conflicts inherent in Mr Hamilton’s multi-faceted interests in the proceeding are capable of being appropriately managed. 

[183] I am satisfied that this proceeding should be stayed because it would otherwise bring the administration of justice into disrepute and undermine the integrity of the Court’s processes in relation to representative proceedings. In a representative proceeding, the administration of justice may be brought into disrepute where the manner in which it is conducted principally serves the interests of the representative applicant and the litigation funder and leaves the interests of group members inadequately protected. Such an arrangement is contrary to the scheme of Part IVA of the Act. 

[185] As I have set out above, there is the very real potential for conflicts of interests to arise and influence Mr Hamilton’ [sic] conduct of the proceedings in ways that are to the detriment of Group Members. The conflicts set out above arise from the many and varied roles Mr Hamilton undertakes in and in relation to this proceeding and are not adequately addressed by the LFA, CMP or the undertakings Mr Hamilton has proffered to the Court. Were the conflicts to arise, there are real concerns about how Mr Hamilton would address them in circumstances where he frames his claim as being primary and those of Group Members as being secondary. Even with the best of intentions, the way in which the myriad of conflicts can manifest may be subtle and insidious. The protection of Group Members is not appropriately addressed by Court oversight, particularly in this proceeding where the Court is bereft of an independent solicitor, that is an officer of the Court, acting on record for the representative applicant. I accept that a permanent stay is regarded as a tool of last resort, however, I am satisfied that it is required in this proceeding. 

[Postscript: On 11 October 2023 Mr Hamilton filed an application for leave to appeal from Cheeseman J’s decision.]

Hamilton v Meta Platforms, Inc [2023] FCA 1148 L

Federal Court of Australia, Cheeseman J,
29 September 2023

Applicant’s Solicitors: N/A 
Respondents’ Solicitors: Corrs Chambers Westgarth; Herbert Smith Freehills 
Applicant’s Funder: JPB Liberty Pty Ltd 

Austlii link

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