Court dispenses with requirement to notify all class members of discontinuance against single defendant

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This proceeding relates to car finance agreements entered into between class members and the defendants where a “flex commission” was paid to the car dealer arranging the agreement.

The plaintiff applied to:

(a) discontinue the proceeding against the third defendant, Macquarie Leasing Pty Ltd (MLPL), under s 33V(1) of the Supreme Court Act 1986 (Vic) (Act);

(b) amend the writ and statement of claim consistent with that discontinuance; and

(c) dispense with the requirement to notify class members of the application to discontinue under s 33X(4) of the Act.

The application was made because the plaintiff’s solicitors were not appraised of the internal organisation of entitlement and liability in relation to the claim as between Macquarie entities prior to commencement of the proceeding. After institution of the proceeding, the solicitors for the Macquarie defendants informed the plaintiff’s solicitors that MLPL did not benefit from the interest charged on the impugned loans, and therefore Macquarie Bank Ltd (being the second defendant) was the proper defendant to the proceeding. The plaintiff brought the discontinuance application as a consequence.

Justice Nichols held that the test in relation to a unilateral discontinuance under s 33V(1) is that it “does not adversely impact the legal or financial position of any group member and will not be unfair, unreasonable, or adverse to the interests of group members” (at [5]).

Her Honour granted the application on the basis that as MLPL never had any entitlement to moneys paid by class members, continuance against MLPL would result in wasted costs, and that discontinuance at this early stage leaves it open to class members to pursue MLPL in any event. It was also advantageous that the parties agreed no costs would be paid due to the discontinuance. Leave to amend the writ and statement of claim was given.

The plaintiff sought to dispense with the requirement to notify class members of a discontinuance on the basis that the time and expense required to identify and notify all class members was disproportionate to any benefit gained. Registered class members had been notified.

Her Honour cited Turner v Bayer Australia Ltd [2021] VSC 241 at [29] with approval as to the factors relevant to the Court’s discretion to dispense with the s 33X(4) requirement:

• whether there is any prospect of a class member opposing the orders sought;
• whether the expense and inconvenience of requiring notice would be disproportionate to the benefit of the notice;
• whether notice would cause or risk confusion or uncertainty for class members; and
• the overarching purpose.

Her Honour held that there is no utility in continuing the proceeding against MLPL and therefore it is not likely any class member could rationally oppose the discontinuance. Her Honour found that while there was no real risk of confusion in notifying class members, doing so would be ‘inutile’. Consequently, her Honour exercised her discretion consistent with the overarching purpose, to dispense with the notice requirement.

Crawford v Australia and New Zealand Banking Group Ltd [2022] VSC 297

Supreme Court of Victoria, Nichols J,
3 June 2022

Plaintiff’s Solicitors: Maurice Blackburn
First Defendant’s Solicitors: Herbert Smith Freehills
Second & Third Defendant’s Solicitors: Gilbert + Tobin
Plaintiff’s Funder: Vannin Capital

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