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This proceeding has been brought on behalf of persons who claim to have suffered harm as a result of the ‘Essure’ or ‘STOP’ contraceptive device prior to 31 December 2018. The devices are alleged to have been defective on the basis that they were designed in such a way that caused recipients chronic inflammation, a risk of perforating the fallopian tube and exacerbate pelvic pain and/or menstrual bleeding.  

In her statement of claim filed in June 2019, the plaintiff alleged that as a result of these defects and the defendants’ involvement in the design, distribution and/or promotion of the devices, the defendants had breached their duty to exercise reasonable care to prevent harm. In addition, the plaintiff made a number of statutory claims under the Australian Consumer Law (ACL). 

In a summons filed in February 2021, the plaintiff sought orders under s 33V of the Supreme Court Act 1986 (Vic) (SCA) that the Court approve: 

  • discontinuance of the proceeding against the seventh and eighth defendants (who were manufacturers of the device) (Discontinuance Application); and 

  • discontinuance of the plaintiff’s claims against all defendants for misleading or deceptive conduct under the ACL and the claim that the devices were not fit for purpose under s 55 of the ACL (and the equivalent Trade Practices Act 1974 (Cth) provisions) (Withdrawal Application). 

Applicable Legal Principles 

Pursuant to s 33V of the SCA, a group proceeding may not be settled or discontinued without the approval of the Court. In discussing the Court’s supervisory role in relation to group proceedings, Dixon J noted that the requirements of s 33V “extend to any substantive claim” and are not only applicable to the “final compromise of a proceeding in its entirety” (at [21]-[24]). 

In considering whether it was necessary to give notice to class members of the plaintiff’s Discontinuance Application and Withdrawal Application, his Honour emphasised that in exercising its discretion, the Court must have regard to the consequences for class members of being bound to an adverse determination that they had no knowledge of. This included weighing up: 

  1. whether there was any real prospect that the class member, acting rationally, would oppose the orders sought; 
  2. whether the expense and inconvenience of requiring notice to be provided would be disproportionate to any benefit; 
  3. whether provision of notice will create a risk of confusion or uncertainty; and 
  4. the Court’s statutory obligation to give effect to the overarching purpose to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute (see [29]). 

His Honour noted that in the present case, no notice had been provided to class members but the solicitors for the plaintiff had written to approximately 382 individuals who were believed to be class members, explaining the effect of the Discontinuance Application and the Withdrawal Application. No class members who had received the correspondence took issue with either application.

The Court’s Analysis  

In granting both the Discontinuance Application and the Withdrawal Application, his Honour emphasised that the issues for determination in approving such orders necessarily differed from those arising in relation to settlement approval under s 33V. His Honour noted that recent decisions have revealed two varying approaches to the approval of discontinuance applications being:  

  • an assessment of whether the discontinuance is fair and reasonable; alternatively 

  • whether the discontinuance would be unfair, unreasonable or adverse to the interests of class members. 

In favouring the latter approach, his Honour emphasised the difference between an application for settlement approval and for discontinuance: 

[48] An application for approval of a settlement involves a bargain reached between the parties, where the benefits and drawbacks may be more readily apparent, permitting a balancing exercise to be undertaken between the advantages and disadvantages to group members.

[49] In contrast, a discontinuance is the unilateral decision by a plaintiff to bring an end to some or all claims in the litigation. There is no agreement between the parties that can be assessed through the prism of a fair and reasonable test. Any favourable consequences to group members that may flow from a discontinuance are uniform and inherent in the act of withdrawing an issue from judicial determination; for example, the saving of future legal costs if the proceeding was pursued. It is not necessary for the court to consider those factors as part of a weighing up exercise. The court’s task in approving a discontinuance, in exercising its protective jurisdiction, is best served by considering whether any detriment would be occasioned by group members that would be unfair, unreasonable or adverse. [Emphasis added]

In the present case, his Honour emphasised that the claims of the plaintiff and class members were not in respect of any physical manufacture of the contraceptive devices but instead related to their design, distribution and promotion. Because the two defendants the subject of the Discontinuance Application were involved solely in the manufacture of the devices, his Honour concluded that it was “not necessary for [those defendants] to remain parties to the proceeding” (at [51]). His Honour continued: 

Their status as parties was to preserve the status quo, avoiding the possible expiry of limitations periods against all defendants, while further inquiries were undertaken. Had the plaintiff been aware of the nature of their involvement at the time the writ was filed, it is likely the discontinued defendants would not have been made parties to the proceeding. In that sense, there can be no prejudice to group members.

His Honour concluded that the claims under the ACL that were sought to be withdrawn were “ancillary to the causes of action that will be maintained in the proceeding” and the plaintiff and class members had “equal (or better) prospects of succeeding against the defendants via the merchantable/acceptable quality, defect/safety defect and negligence claims that are alleged” (at [52]). 

In relation to costs of the applications, his Honour found that whilst the remaining defendants would ordinarily be entitled to the costs of the Discontinuance Application and the Withdrawal Application, those costs were likely to be minimal having regard to the early state of the proceeding and overlap with other remaining causes of action. 

Finally, his Honour concluded that it was just to dispense with the requirement of notice to class members under s 33X as no class member, acting rationally, would oppose the discontinuance or withdrawal. The Court appeared to be further comforted by the plaintiff’s solicitors’ communications to suspected class members in relation to the proposed application and the lack of opposition by individuals who had received that correspondence.

Turner v Bayer Australia Ltd [2021] VSC 241

Supreme Court of Victoria, Dixon J
14 May 2021

Plaintiff’s Solicitors: Slater & Gordon;
Defendants’ Solicitors: Clayton Utz / Mills Oakley;
Plaintiff’s Funder: N/A

Austlii Link: Accessible here

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